Castle Biosciences Fourth Quarter and Full Year 2025 Earnings Call - TissueCypher Momentum and AdvanceAD Early Traction Set the Stage While Margin and Guideline Headwinds Persist

Operator: Good afternoon, and welcome to Castle Biosciences’s fourth quarter and full year 2025 conference call. As a reminder, today’s call is being recorded. We will begin today’s call with opening remarks and introductions, followed by a question and answer session. I would like to turn the call over to Camilla Zuckero, Vice President, Investor Relations and Corporate Affairs.

Camilla Zuckero, Vice President, Investor Relations and Corporate Affairs, Castle Biosciences: Thank you, operator. Good afternoon, everyone. Welcome to Castle Biosciences’s fourth quarter and full year 2025 results conference call. Joining me today are Castle’s Founder, President, and Chief Executive Officer, Derek Maetzold, and Chief Financial Officer, Frank Stokes. Information recorded on this call speaks only as of today, February 26th, 2026. Therefore, if you are listening to the replay or reading the transcript of this call, any time-sensitive information may no longer be accurate. A recording of today’s call will be available on the Investor Relations page of the company’s website for approximately three weeks following the conclusion of the call.

Before we begin, I would like to remind you that some of the statements made today will contain forward-looking statements, including statements about expected addressable markets, statements containing projections regarding future events or our future financial or operational results and performance, including our anticipated 2026 total revenue and the impact of our investments and growth initiatives, including our ability to achieve long-term growth and drive stockholder value. Forward-looking statements are based upon current expectations and involve inherent risks and uncertainties, and there can be no assurances that the results contemplated in these statements will be realized. A number of factors and risks could cause actual results to differ materially from those contained in these forward-looking statements. Please refer to the risk factors in our most recent SEC filings for more information.

These forward-looking statements speak only as of today. We assume no obligation to update or revise these forward-looking statements as circumstances change. In addition, some of the information discussed today includes non-GAAP financial measures such as adjusted revenue, adjusted gross margin, and adjusted EBITDA that have not been calculated in accordance with US GAAP. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables at the end of our earnings release issued earlier today, which has been posted on the Investor Relations page of the company’s website. I will now turn the call over to Derek.

Derek Maetzold, Founder, President, and Chief Executive Officer, Castle Biosciences: Thank you, Camilla. Good afternoon, everyone. We closed out a strong fourth quarter and delivered an outstanding year in 2025, driven by continuing momentum across our core revenue drivers, disciplined execution, and the dedication of our employees. I’m intentional in mentioning the dedication of our employees. It is through their efforts that we’re able to deliver clinically actionable results with our current commercial tests today and tomorrow, with the addition of future tests. With fourth quarter revenue of $87.0 million, we delivered revenue of $344.2 million for the full year of 2025. Excluding DecisionDx-SCC and IDgenetix revenue from both 2025 and 2024, our revenue growth for the year would have been approximately 34%.

For the full year, we also delivered total test report volume of 105,053 test reports from our core revenue drivers, increasing 37% compared to 2024, highlighted by continuing momentum in TissueCypher report volume, which achieved 86% growth over 2024. As I reflect on our many accomplishments across our growth initiatives, we have succeeded in evolving Castle considerably. Over the course of 2025, we completed the acquisition of Previse, entered into a collaboration and license agreement with SciBase, launched our first-in-class AdvanceAD-Tx test, further strengthened our commercial teams, and continued to solidify an already strong balance sheet. At the same time, DecisionDx-Melanoma reached a significant milestone, surpassing 230,000 test orders since launch, and we continue to build a robust body of clinical evidence across our entire portfolio.

We continue with our unwavering commitment to improving patient care. Everything we do at Castle remains focused on innovative, clinically actionable tests that help clinicians make better informed decisions and improve outcomes for their patients. We can only accomplish this mission because of the people who call Castle home. I sincerely thank our entire team for their hard work, resilience, and commitment throughout the year. None of this progress would be possible without them. As we review 2025 results, I will also outline how we are thinking about our growth story, starting with the drivers of our near-term performance in 2026, then turning to our midterm opportunities, and finally, discussing the longer-term pipeline that we believe positions Castle well for sustained growth and value creation. Frank will then provide additional 2025 financial highlights and insight for 2026 before we turn to your questions.

Let’s start with our core revenue drivers and what we see as the bulk of our 2026 top-line growth story, DecisionDx-Melanoma and TissueCypher. In 2025, for DecisionDx-Melanoma, we delivered 39,083 test reports, representing 9% year-over-year growth, achieving our high single-digit volume growth commitment. Importantly, we continue to see new clinicians ordering DecisionDx-Melanoma for the first time. Specifically, in 2025, we had 1,795 clinicians order DecisionDx-Melanoma for the very first time. This was consistent with our experience in both 2024 and 2023, reflecting continued strong interest and adoption. Total ordering clinicians over the lifetime of this test is nearing 17,000.

Our compelling body of evidence for DecisionDx-Melanoma also continues to expand, with now 58 peer-reviewed publications supporting the clinical use of the test, which is not only a key driver for test adoption, but also meaningfully differentiates our test from the competition. We saw an approximately 31% patient penetration exiting 2025. We believe DecisionDx-Melanoma remains a durable growth driver in 2026. Turning to our gastroenterology franchise, TissueCypher delivered 39,014 test reports in 2025, compared to 20,956 test reports in 2024, representing 86% growth and surpassing 80,000 tests ordered to date. We believe this adoption reflects growing clinical recognition of TissueCypher’s value in determining a patient’s individual risk of progression from Barrett’s esophagus to high-grade dysplasia or esophageal cancer.

Barrett’s esophagus is the only known risk factor for the development of esophageal adenocarcinoma, one of the fastest-growing cancers in the US. Unfortunately, esophageal adenocarcinoma is also one of the most aggressive and difficult cancers to treat, with a five-year survival rate of less than 20%. In 2024, the American Gastroenterological Association, or AGA, released a clinical practice guideline for Barrett’s esophagus, stating that it can be effectively treated with endoscopic procedures like ablation, and noting that identifying high-risk patients is crucial. Importantly, TissueCypher was highlighted as the first prognostic test capable of identifying patients with Barrett’s esophagus at risk of progression to high-grade dysplasia or esophageal cancer.

We believe this recognition by the AGA reinforces TissueCypher’s role in providing personalized and clinically validated risk stratification, which in turn assists clinicians and their patients in making better management decisions, with the end goal of extending the lives of high-risk patients with interventions at the precancerous state. For the year ended December 31st, 2025, we had 2,082 new ordering clinicians for the TissueCypher test, up from 1,234 in 2024. We remain highly focused on education and building awareness to drive continued adoption. With roughly 11% patient penetration for TissueCypher exiting 2025, an expanded commercial team, and the compelling clinical actionability with a high clinical need, we continue to believe TissueCypher is still in the early stages of a long runway for significant growth in 2026 and beyond.

Let’s move on to the midterm phase of planned potential growth, which we view as 2027 and 2028. In addition to the continued contribution of our core revenue drivers, let’s discuss our recently launched AdvanceAD-Tx test. AdvanceAD-Tx is our first-in-class test designed to guide systemic treatment selection for patients 12 years and older with moderate to severe atopic dermatitis. We clinically launched the test on a limited access model in late November 2025. The launch of AdvanceAD significantly expanded our total addressable market and reinforced our commitment to the dermatology community. Early results have exceeded our high expectations. As we announced in early January, we limited access to approximately 150 dermatological accounts in the U.S.

Through year-end, we were pleased to see that more than half of these initial accounts had ordered 1 or more tests in the first 5 weeks of clinical availability. As mentioned in our 3rd quarter 2025 earnings call, our market research suggested a high level of clinical need and adoption. The results of the initial 5 weeks of clinical availability matched those expectations. In fact, through mid-February, we received close to 500 orders, continuing to reinforce our expectations for adoption from our mid-2025 market research studies. We expect to expand clinician access in a phased manner based on a number of internal metrics. We expect revenue contribution from AdvanceAD to be immaterial in 2026, with material revenue contribution expected in 2027 or 2028.

Based upon revenue cycle timelines, we would expect to be in a position to communicate more about reimbursement in the second half of 2026. Moving on to the next phase of our growth strategy, the longer term, which we view as 2028 and beyond, I’ll touch on our pipeline initiatives and strategic investments. Let’s start with our GI pipeline. We acquired a non-endoscopic cell collection device with our acquisition of Previse. We plan to use this collection device to gather samples for development of a pipeline test for differential diagnostic and screening support for GI diseases. We expect to initiate and enroll our first patient for the development study in the second quarter of 2026. This test will be upstream from TissueCypher, and we expect preliminary data before the end of 2026.

This collection device requires FDA clearance. We currently expect to both file our submission and potentially receive clearance in 2026. Next is our collaboration with SciBase, where we will evaluate their electrical impedance spectroscopy, or EIS technology for short. We have U.S. and select country rights to a number of possible indications. The first indication we are studying is the ability of a handheld EIS device or pen, to predict flares in patients with atopic dermatitis. We believe there are at least two additional intended uses in the atopic dermatitis population alone, should we see promising results from initial flare prediction study. Importantly, this approach could offer a nice synergy with our AdvanceAD-Tx test by extending the ability to support patients across different points in their disease journey.

We expect to initiate the EIS pen study and enroll our first patient for AD flares in the second quarter of 2026 and have preliminary development data before the end of 2026. To wrap up our near, mid, and long-term growth strategy, we continue to expect M&A to play a role. With our strong balance sheet and history of successful execution in this area, we continue to evaluate candidates that fit within our strategic opportunities criteria. That is, number 1, test near or at market. Number 2, test near or at reimbursement. Number 3, tests that can be promoted within sales teams the size of our current teams or less, that is, around 100 or less. Four, tests within or complementary to our current customer verticals as a priority.

In summary, we believe our financial strength positions us well to invest across our growth initiatives for continued value creation. With that, I’ll now turn the call over to Frank.

Frank Stokes, Chief Financial Officer, Castle Biosciences: Thank you, Derek. Good afternoon, everyone. As Derek noted, we delivered strong fourth quarter in 2025 financial results, supported by disciplined execution across the business. In the fourth quarter of 2025, we delivered total revenue of $87 million, resulting in $344.2 million for the full year 2025, exceeding our guidance range. Full year 2025 outperformance was driven predominantly by our core revenue drivers, including significant year-over-year test volume growth for TissueCypher at 86%. For 2026, we anticipate generating total revenue of $340 million-$350 million. This is growth to mid to high teens over 2025, if you exclude DecisionDx-SCC and IDgenetix revenue from our 2025 and 2026 totals. We do not disclose revenue by test.

Our revenue guide reflects continued growth in our core dermatologic and gastrointestinal franchises, driven primarily by continued TissueCypher momentum, with immaterial revenue expected from our AdvanceAD-Tx test and no revenue included for DecisionDx-SCC. Our gross margin during the fourth quarter was 76.3%, compared to 76.2% in the fourth quarter of 2024, and our gross margin for the full year 2025 was 69.2%, compared to 78.5% in 2024. Affecting 2025 gross margin was the loss of revenue from DecisionDx-SCC and the one-time adjustment of an acceleration of amortization expense of approximately $20.1 million during the three months ended March 31st, 2025.

Our adjusted gross margin, which excludes the effects of intangible asset amortization related to our acquisitions and excludes the effects of revenue adjustments in the current period associated with test reports delivered in prior periods, was 77.6% for the quarter and 79.8% for the year, compared to 81.1% and 82% for the same periods in 2024. Turning to expenses, our total operating expenses, including cost of sales for the quarter, were $90.8 million, compared to $82.3 million for the prior year, and were $387 million for the full year 2025, compared to $323.4 million for 2024. As Derek outlined, our growth plan spans the near, medium, and long term.

In support of that plan, we expect operating expenses to increase moderately in 2026 as we continue to support and invest in our core franchises, advance our pipeline, and support key reimbursement and commercial initiatives. Sales and marketing expenses were $138.1 million for the full year, compared to $123.5 million for 2024. The increase is primarily driven by increased personnel costs due to both expanded headcount and compensation adjustments, higher expenses associated with training events and speaker conferences, and higher sales-related travel expenses. General and administrative expenses were $91.2 million for the full year, compared to $76.6 million for 2024. The increase is primarily attributable to increased personnel costs from expanded headcount and compensation adjustments and higher information technology-related costs.

Cost of sales expenses were $71 million for the full year, compared to $60.2 million for 2024, primarily due to increased personnel costs from expanded headcount and compensation adjustments and higher expenses related to services, supplies, and depreciation. R&D expenses were $51.9 million for the full year, compared to $52 million for 2024, primarily due to increased personnel costs from expanded headcount and compensation adjustments, offset by lower clinical studies costs. Total non-cash stock-based compensation expense, which is allocated among cost of sales, R&D expense, and SG&A expense, was $45.9 million for the full year, down from $50.3 million for 2024. Interest income was $11.8 million for the full year 2025, compared to $12.9 million for 2024.

Our net loss for the fourth quarter of 2025 was $2.3 million, compared to net income of $9.6 million for the fourth quarter of 2024. Our net loss for the full year 2025 was $24.2 million, compared to net income of $18.2 million for 2024. Diluted loss per share for the fourth quarter was $0.08, compared to diluted earnings per share of $0.32 in the fourth quarter of 2024. Diluted loss per share for the full year 2025 was $0.83, compared to diluted earnings per share of $0.62 for 2024. Adjusted EBITDA for the fourth quarter was $11.5 million, compared to $21.3 million for the comparable period in 2024.

For the full year 2025, adjusted EBITDA was $44 million, compared to $75 million in 2024. Net cash provided by operating activities was $26.9 million for the fourth quarter of 2025, and $64.3 million for the full year. Looking ahead, historically, in the first quarter of the year, we’ve seen net operating cash use due in part to annual cash bonus payments and certain healthcare benefit payments that do not recur during the remaining three quarters of the year.

Net cash used in investing activities was $60.4 million for the 12 months ended December 31st, 2025, consisted primarily of purchases of marketable investment securities of $188.7 million, purchases of property and equipment, our asset acquisition of Previse and purchases of debt securities classified as held to maturity, partially offset by the maturity of marketable investment securities. Capital expenditures totaled $36 million in 2025. For 2025, we generated free cash flow defined as net cash provided by operating activities, less capital expenditures of $28.3 million. We expect capital expenditures to decline in 2026. As of December 31st, 2025, we had cash equivalents, and marketable securities of $299.5 million.

In closing, I’m pleased with our strong 2025 financial results, which reflect our continued track record of disciplined execution and focus on driving long-term shareholder value. I’ll now turn the call back over to Derek.

Derek Maetzold, Founder, President, and Chief Executive Officer, Castle Biosciences: Thank you, Frank. Before concluding, I want to share my sincere gratitude to each and every member of the Castle team who continue to deliver meaningful impact for patients and clinicians every day. I am incredibly proud of our team and grateful for the culture they continue to build here at Castle. In summary, we are executing on the drivers of our next phase of growth, supported by disciplined capital allocation, operational excellence, and relentless innovation, which we believe positions us well for long-term sustainable growth and value creation. Thank you for your continued interest in Castle. We are happy to take your questions. Operator.

Operator: Thank you, Derek. To ask a question, please press star followed by 1 on your telephone keypad now. If you change your mind, please press star followed by 2 to exit the queue. When preparing to ask your question, please ensure that your device is unmuted locally. Finally, in the interest of hearing from as many of you as possible, please limit yourselves to 1 question and 1 follow-up if needed, and then reenter the queue for any further questions. Our first question will be from the line of Kyle Mikson with Canaccord Genuity. Please go ahead. Your line is open.

Alex Vukasin, Analyst, Canaccord Genuity: Hi, this is Alex Vukasin. I’m on for Kyle Mikson. Thank you for taking our questions. Congratulations on a strong finish to 2025. When last we spoke in early 2026, you noted you’d recently submitted new data to NCCN. Recognizing that DecisionDx-Melanoma is unique and that it’s a 31-GEP test that has demonstrated improved patient survival and GEP score provides meaningful prognostic information beyond traditional staging alone, can you just concisely elaborate on your takeaway from the recent NCCN update? What is your level of confidence that DecisionDx-Melanoma could ultimately be included in guidelines, and what does that rank in terms of level of importance? Thank you.

Derek Maetzold, Founder, President, and Chief Executive Officer, Castle Biosciences: A lot of questions there. I’ll try and answer what I can here. I might miss something. I think the most important element to think about is that the US standard across all of the sort of organizations that put out guidelines or recommendations for considering to perform or to avoid a sentinel lymph node biopsy surgical procedure has been 5% for several decades. That was not changed in this update either. It remains that if a patient and a physician or is a healthcare provider believes the chance of having a positive node is greater than 5%, then one should consider and discuss that or encourage a patient to undergo that procedure.

As you know or may know, our data regarding DecisionDx-Melanoma has shown time and time again in both prospective studies and retrospective studies that a low-risk result from DecisionDx-Melanoma gets you comfortably below 5%, indicating that a patient can have a conversation and hopefully avoid what’s an unnecessary surgical procedure. What the guidelines also showed with this update when they reviewed the MERLIN_001 study is that the Merlin test fails to achieve this threshold of 5%, which we knew last year when it was published in September, October 2025. The current guidelines would say, there isn’t a recommendation to consider DecisionDx-Melanoma, which we’ll get to in just a minute. There isn’t a acknowledgment or recommendation that the SkylineDx test actually gets below 5%.

In fact, they also state that it acts similarly to nomograms, which today can’t get below 5% from a population basis set. It’s a little head-scratching. To answer your question about the outcomes data, such as our SEER publication that was not included in the updated guidelines, I think we did a quick count. We have 58 peer-reviewed publications that review our test for both predicting the likelihood of a sentinel lymph node biopsy outcome, you know, being below 5% or greater than 5%, as well as survival benefits. Talking about recurrence-free survival, distant metastatic-free survival, non-metastatic survival. We also have clinical use studies showing how doctors have safely used our test results to manage in clinical care.

As you noted, we also have data from the National Cancer Institute where we matched people who received DecisionDx-Melanoma as part of their clinical care with patients in the SEER database who did not receive our test as part of their clinical care and found that when care is guided with the use of our test results, there is a association with improved survival, not just overall survival, more importantly, non-metastatic survival. It’s a bit of a head-scratcher. It turns out that of those 58 articles that have been published and easily found by doing a literature search, only 11 are cited in the current guidelines, meaning 47%, including the one you mentioned earlier, the NCDB database, were not reviewed by the NCCN committee.

That’s a good head scratcher about why 47 studies were ignored when what they’re looking for is apparently, more published evidence to support the use of our test.

Alex Vukasin, Analyst, Canaccord Genuity: Thank you. That was very helpful. One last one from me. One thing we haven’t touched upon is the FDA submission for this DecisionDx-Melanoma. What is your timeline on when we could see FDA approval for this test? How will it help you in payer discussions, effectively drive higher adoption and potentially accelerate test volume growth for this test? Thank you.

Derek Maetzold, Founder, President, and Chief Executive Officer, Castle Biosciences: Yeah, that’s a good question there. We are preparing our submission as we speak now. We believe that it will be accepted as a de novo 510(k) submission as opposed to PMA submission, and those timelines from the time of submission to time of clearance are pretty well prescriptive by the FDA. That may be something which we see towards the end of the year, maybe early next year. That’s hard to say. In terms of sort of impact on clinician updates, since that was the last part of your question, I don’t know if there’s any evidence that we have seen where you take a laboratory-developed test and move it over to a IVD cleared device, where you would see or expect a sort of substantial change in sort of volume uptake.

There are certainly gonna be clinicians out there, I think, who may be waiting for sort of an FDA flag of approval, so maybe I’m being a little too conservative there. I think the bigger impact and the reason why we are going forward on this is looking at the newer state biomarker laws, which among other things, would indicate that across most of the states who have enacted biomarker laws, if you have an FDA cleared or approved device, then that qualifies for reimbursement or payment from commercial insurance carriers, with few other caveats there. Our primary drive, to be honest, about looking to achieve 510(k) clearance, was to focus on leveraging state biomarker laws to reduce non-payments from commercial insurance carriers. That’s the value that we would see.

I think the quicker we can get that into the FDA and out of the FDA, will then have a subsequent impact, I think, on our overall commercial ASP.

Alex Vukasin, Analyst, Canaccord Genuity: Thank you very much.

Operator: The next question will be from the line of Subbu Nambi with Guggenheim Securities. Please go ahead. Your line is open.

Thomas, Analyst, Guggenheim Securities: Hey, guys. This is Thomas on for Subbu. Thanks for taking our questions. Maybe one on ADTX. R-Tech indicated a high level of awareness of the test already in the field. Looks like from your prepared comments, that’s pretty consistent. Can you just speak a bit to the strategy of your sales team approaching derms with that test and what’s led to the rapid KOL awareness?

Derek Maetzold, Founder, President, and Chief Executive Officer, Castle Biosciences: Let’s see. I’ll try to answer that question. So that’s interesting. I wouldn’t have guessed we’d had generated that much awareness, depending upon the panel you guys looked at. That’s, that’s quite positive, by the way, so thank you for that. We released the test, as we talked about, I guess, back in January, maybe with a limited access launch, and I guess the last week of November, so kind of 5 weeks of availability to roughly 150 accounts that were dermatological accounts. The majority of those were accounts that were early adopters of gene expression profile testing. We knew that they had a predilection towards adopting new technologies for patient care.

There were also in there a few clinical sites that were not necessarily early adopters of gene expression profile tests, and there were also a small number of KOLs that were not involved in our studies or don’t treat skin cancer. Of those, I think we had noted in January that over half of them had ordered at least 1 or more tests in the first sort of 5 weeks, and that’s a pretty good uptake, we thought, relative to Thanksgiving being in there, Christmas and Hanukkah, from a reduced office view standpoint. So that felt quite positive. Through, I think, mid-February, maybe it was last week, I can’t remember the exact date, we had received over 500 orders from the accounts that we’ve allowed to have initial access to.

I think we would concur that the, that the interest is as high as we thought it would be relative to the market research that we completed last summer, and that continues to be the case here. As I look forward to the rest of 2026, we look at sort of what’s the current split? Currently, we have our field force, which was 100% bonused on DecisionDx-Melanoma test results, because that’s the one that we have consistency of payment for. There are some small, I guess you could call them, kickers or extra bonus kickers, on some group or team-based atopic dermatitis volume growth and test volume or growth.

Given we have control of this with a limited access perspective, it will remain sort of, you know, 100% melanoma focus with some atopic dermatitis sprinkled in. We’ll probably shift that to a 90%, 10% here in the second quarter going forward, still trying to control access, so we can do two things. One of them is or three things actually. One of them is to maintain our focus and momentum on DecisionDx-Melanoma. Two, is to make sure that as we, as we see volume expanding, that our clinical laboratory and the logistics program of having to sort of, have kits available with our buffer preservation.

in doctor’s offices at the right time when patients walk in is, continues to be a seamless process so that we don’t have a frustration building up with our customer base in dermatology. Third was, of course, making sure that we watch the sort of line of ASP growth. As we see our ASP growing along our models, we’ll go ahead and release this to more and more customers. I would concur with you if you’re seeing a high level of awareness, enthusiasm among your physician panel, that is what we’re seeing, too, in terms of enthusiasm.

Operator: Thank you. Our next question today will be from the line of Puneet Souda with Leerink Partners. Please go ahead. Your line is now open.

Carlos, Analyst, Leerink Partners: Hey, folks. This is Carlos on for Puneet. Thanks for taking the question. I’ve got 2 about TissueCypher. The first one is if you could just give us an update on the sales reps and their activity. I think last we checked, there were 65 reps, and then you got a couple more from Previse. Do you see yourself expanding the reps more this year? Just generally, how they’re contributing to the growth of that account? Thanks.

Derek Maetzold, Founder, President, and Chief Executive Officer, Castle Biosciences: We continue to add to the TissueCypher sales team, and we continue to do so over the course of the year as we see territories reaching volume levels that we think is difficult to sort of maintain a balance between maintaining and growing volume within existing customers, as well as hunting for new customers. We think both dermatology and the GI specialties shouldn’t require more than 100 sales reps, and so as we sort of see volume come in, we will sort of be marching in a methodical fashion towards trying to get below that number, be higher than we were before. That’s kind of where we’re sitting where we are now, and I and throughout the remainder of 2026. I think that was the comment, right? Yeah. Yeah.

Carlos, Analyst, Leerink Partners: Okay, thank you. One more on TissueCypher. You know, you talked a bit last year about an opportunity to penetrate into private equity roll-ups, and it would be helpful to get an update on whether that’s something you’re executing on, that’s been driving the, frankly, really incredible growth you’ve been seeing. Is that still an opportunity that can drive a step-up of growth in the future, or is it something that, you know, after some research, you decide to focus your efforts to in other areas? Thank you.

Derek Maetzold, Founder, President, and Chief Executive Officer, Castle Biosciences: Great, great question there. One, as you look at volume in 2026, including fourth quarter volume, I don’t think you or we will be able to discern back the impact on sort of group practices or even PE groups, adopting a sort of more formulatic approach to saying, "Hey, we want to go ahead and treat Barrett’s esophagus patients, regardless of which GI is treating that patient in a parallel manner." We have seen some success in some smaller groups that would suggest as we go through 2026, that we will be able to go ahead and tackle and improve efficiency among larger groups.

That may contribute to some volume expansion in 2026, I think the volume expansion, both year-over-year and quarter-over-quarter growth in TissueCypher in 2025, is largely based to just the organic need of individual clinicians seeing the value of this test clinically and deciding to go ahead and try it and then adopt it for their patient care.

Carlos, Analyst, Leerink Partners: Got it, that makes sense. If I could just sneak this in. This isn’t something, though, that you formally adopted a strategy or is it a strategy that you’ve decided to not formally adopt, focusing on the...

Derek Maetzold, Founder, President, and Chief Executive Officer, Castle Biosciences: No, I’m sorry. I’m sorry. I’m sorry if I inadvertently ignored your question directly.

There is interest in large group models, whether you want to call it PE groups only or just larger practices of gastroenterologists, to say, "Hey, we should be treating Barrett’s Esophagus disease uniformly for quality standards and good patient care, as opposed to one-offs." That is a, an important strategy that we have across the gastroenterology sales force, our strategic accounts team, to say, "Hey, how do we move practices from being individual clinicians are responsible for individual patients?" To saying, "This is a test which has clearly shown it finds people at high risk for disease progression." We do know that if you go ahead and use interventional tools, be it ablation or ablation with surgical techniques as well, that you can basically remove that Barrett’s Esophagus disease, and if you remove it does not progress to esophageal cancer.

We know we can cure or stop patients from progressing to cancer if we know who to intervene on. That’s a very attractive commentary in terms of, you know, why should the survival of me as a patient be any different than Frank Stokes? I see a different doctor than he does. I think we will see the success that we’re beginning to go ahead and believe we will feel, come to fruition in 2026. It is definitely a strategy that we’re looking to continue to, develop, I guess you would say.

Carlos, Analyst, Leerink Partners: All right. Thanks, really appreciate it. Congrats on the quarter.

Operator: The next question today will be from the line of Matthew Parisi with KeyBanc Capital Markets. Please go ahead. Your line is now open.

Matthew Parisi, Analyst, KeyBanc Capital Markets: Hi. Yes, this is Matthew Parisi, on for Paul Knight at KeyBanc Capital Markets. First off, congrats on the great quarter. Just a quick question to begin would be around volumes for melanoma. I know you guys do not provide volume guidance, but following two consecutive years of high single-digit volume growth for the melanoma test, would it be reasonable to assume continued high single-digit volume growth for 2026? Frank, do you want to handle that?

Frank Stokes, Chief Financial Officer, Castle Biosciences: Yes. Thanks for the question. I think we’re going to see mid to high single digits volume growth in melanoma this year as well. We’re in a very nice penetration level there with, you know, 32% maybe of the patients being tested now, and we think, you know, something over half the physicians, maybe even 60% of the targetable physicians or clinicians are using the test regularly. We’ll continue to see that same level of growth we would expect this year.

Matthew Parisi, Analyst, KeyBanc Capital Markets: Thank you. Just one more would be, I’m not sure if I missed it earlier, but of the roughly 100 kind of salesforce team, could you give some insight into the split between Derm and GI, and what would the kind of % be?

Frank Stokes, Chief Financial Officer, Castle Biosciences: We do not disclose the number of reps in each sales force. What we’ve said is that we think each sales force can be well managed fewer than 100 reps. I think back in April of 2025, we said that the TissueCypher sales force had been expanded to 64, and I think we said last year also, the dermatology sales force was in the 70s. We’re still in those vicinities. We will make expansions, as Derek highlighted earlier this year, to accommodate our continued growth. We think we can run both sales forces under 100 for some time here.

Matthew Parisi, Analyst, KeyBanc Capital Markets: Awesome. Thanks so much.

Frank Stokes, Chief Financial Officer, Castle Biosciences: Of course.

Operator: The next question will be from the line of Catherine Schulte with Baird. Please go ahead. Your line is now open.

Josh, Analyst, Baird: Hi, guys. This is Josh on for Catherine. Thank you for taking questions. Maybe first, could you share your expectations for TissueCypher volume growth in 2026? Do we expect this to come more from further penetration within your existing ordering base or adding new clinicians? Then where are you from a clinician penetration perspective? Thanks.

Frank Stokes, Chief Financial Officer, Castle Biosciences: Yeah, I think last year we said for 2024... Go, go Derek.

Derek Maetzold, Founder, President, and Chief Executive Officer, Castle Biosciences: No, you go, you go.

Frank Stokes, Chief Financial Officer, Castle Biosciences: Yep. I think for 2024, we said we had something over 1,000 new ordering physicians in 2024, for 2025, something over 2,000. You know, those two data points together gets you to 3,000 clinicians, which is probably, we think, again, similar to Derm, which is part of the appeal to the therapeutic area for us. It looks like there’s 12-14,000 targetable clinicians in the GI space. You know, we’re probably, you know, 25-30% penetrated in the clinician or HCP level penetration. I think if you just take the best numbers we have on a patient basis, we’re about 11% penetrated.

Clearly, we continue to expect volume growth this year, you know, probably something close nominally to the growth we saw just on a nominal test basis for 2024 to 2025, rather, into 2026. You know, we are getting into the larger numbers, so the percent growth becomes the hurdle becomes a bit higher, and you’re into the later adopter physicians. Yeah, we should see continued volume growth and maybe not quite the percentages we’ve seen in 2024 and 2025, just given where we are penetration-wise, but continue to see strong growth from a volume perspective on TissueCypher for the year.

Josh, Analyst, Baird: Great. I was also wondering if we should expect quarter-over-quarter declines for DecisionDx and melanoma volumes in 1Q? How should we think about the cadence of year-over-year volume growth throughout 2026, just given some of the tougher year-over-year comps in the back half? Thanks.

Frank Stokes, Chief Financial Officer, Castle Biosciences: Yeah. It’s what, melanoma’s got just very predictable seasonality. What we see is flattish sequential growth each quarter except Q1 to Q2. It’s driven. It’s really driven primarily by physician encounters, physician-patient encounters. It’s a little different than just business days. You know, Q1, there are a couple of large Derm meetings that take place in Q1 that take physicians out of their practice, so that reduces the patient encounters. You know, we’ve talked before, you know, 100 tests, one way or the other, is still flattish on a basis of 10,000+ tests. That’s the pattern we’ve seen since, you know, since 2021.

Coming out of COVID, we’ve seen that pattern very consistently, and so you kind of have flattish sequential growth until you get Q1 to Q2. That tends to be your step-up, and then that, you know, that new level or new stepped-up level is durable through the next several quarters. We would expect the same flattish performance. You can really look at the volumes we disclose each year back to 21 and see pretty predictably what volumes look like Q4 to Q1.

Operator: Thank you. The next question will be from the line of Mason Carrico with Stephens. Please go ahead. Your line is now open.

Mason Carrico, Analyst, Stephens: Hey, guys. Thanks for taking the questions here. Derek, could you give us your latest thoughts on the commercial strategy for the Derm team if we were to see a positive draft LCD get published mid-year for DecisionDx-SCC? I guess, how are you thinking about splitting reps’ time between melanoma, SCC, and your AD test now, if that were to play out?

Derek Maetzold, Founder, President, and Chief Executive Officer, Castle Biosciences: Yeah, that’ll be a very, very nice problem to have, Mason, won’t it? I think there are a couple of variable triggers there, right? Having the reconsideration request resulting in an LCD, which kind of covers it the way it was covered before by Novitas, let’s just assume that’s the base case. I would say that we would begin to go ahead and fold SCC back into the sales bag from a commission standpoint, although we have to watch for timing. It may be up to a year before you would see SCC gain reimbursement.

I think as we talked about in previous years that if we see Limelight regaining coverage, then the question will be, do you want the run rate for that test to be $25 million a year, or do you want it to be $100 million a year? There’s some interesting trade-offs to go ahead and think through there. We think that it’s probably difficult to have three tests being sold extremely well by the same person, the same customer base.

If we’re faced with that wonderful opportunity or problem, I guess, depending on what you’d say, if we are seeing what we, what we’d like in terms of the reimbursement growth for the Advance AD test, then we could come around and say we can profitably maybe expand our sales forces to go ahead and make sure we can handle all 3 opportunities, DecisionDx-Melanoma, Advance AD, and the regaining of coverage for DecisionDx-SCC. I think we’ll have to see kind of how those latter two things come out, the SCC draft timing, how confident we are about will that be finalized in 3 months or will it take 1 year? Also our sort of climb in Advance AD for atopic dermatitis, and come to some decisions there.

Otherwise, that’s been part of our planning about how we approach that, and there’s a few different variables there, but it will represent a very, very nice opportunity for patient care and for the company overall.

Camilla Zuckero, Vice President, Investor Relations and Corporate Affairs, Castle Biosciences0: Got it. That’s helpful. Would you remind us when NCCN typically updates guidelines for SCC? What new data, I guess, were you able to submit ahead of that panel meeting, that maybe previously wasn’t submitted or previously wasn’t reviewed, in last year’s update?

Derek Maetzold, Founder, President, and Chief Executive Officer, Castle Biosciences: Yeah, that’s a good question. I might be off on the facts here, I’ll say that caveat here. I believe the submission that would have gone in last spring included our 2 papers for showing the benefit to predicting adjuvant radiation therapy responsiveness. Those papers are published, I think, in mid 2024, the 3rd quarter of 2024, they missed the 2024 cutoffs. Those would have been submitted last year. Their annual in-person meeting is usually around the most surgical meeting in May of each year. If they’re kind of doing a 1-year cadence of updating guidelines, maybe that comes out between now and call it late April or May will be the timing I would expect to see.

Camilla Zuckero, Vice President, Investor Relations and Corporate Affairs, Castle Biosciences0: Got it. That’s helpful. Thank you, guys.

Operator: Thank you. This will conclude Q&A for today. I would now like to hand the call back to Derek Maetzold for any closing remarks.

Derek Maetzold, Founder, President, and Chief Executive Officer, Castle Biosciences: This does conclude our fourth quarter and full year 2025 earnings recall. We do thank you again for joining us today and for your continued interest in Castle Biosciences.

Operator: Thank you. This concludes today’s conference call, and you may now disconnect your lines.