Myriad Genetics (MYGN) Q2 2026 earnings review
Guidance Slashed and EBITDA Suspended as Payer Friction Crushes ASP
Myriad Genetics reported a disastrous second quarter, missing expectations and completely suspending its FY26 Adjusted EBITDA guidance. While total test volume was relatively stable (down 1% YoY), severe 'payer friction' and an $11 million negative adjustment for prior-period collections drove a 9% collapse in average revenue per test. Consequently, total revenue fell 11% YoY to $190.7M. The confident narrative from Q1 regarding a back-half acceleration has been entirely abandoned; management slashed its FY26 revenue guidance by roughly $90 million at the midpoint and engaged an external consulting firm to overhaul operations. The core business is bleeding pricing power, overshadowing ongoing pipeline developments.
🐂 Bull Case
The Cancer Care Continuum saw 6% YoY volume growth, showing that underlying clinical demand for its hereditary cancer and tumor profiling tests remains intact despite pricing headwinds.
The company successfully launched Prolaris + AI and the FirstGene prenatal screen, and submitted Precise MRD for breast cancer to MolDX, laying the groundwork for future product cycles.
🐻 Bear Case
A 9% YoY drop in average revenue per test signals severe reimbursement pressure and payer friction that volume gains cannot offset, compressing Adjusted Gross Margins from 71.5% to 66.9%.
Suspending EBITDA guidance and hiring outside consultants indicates that management has lost visibility into the company's cost structure and near-term profitability path.
⚖️ Verdict: 🔴🔴
Strong Bearish. The sudden and severe 11% revenue contraction, driven by deteriorating ASPs and $11M in retroactive collection write-downs, fundamentally breaks the growth thesis. Suspending EBITDA guidance just one quarter after reaffirming it destroys management credibility.
Key Themes
Severe ASP Compression Across All Segments
Reversing. The narrative that volume growth would drive top-line expansion collapsed. Despite Cancer Care Continuum volume growing 6% and Mental Health volume growing 4%, their revenues plummeted 11% and 3%, respectively. Management cited increased payer friction, a write-off of aged receivables in Mental Health, and an $11.0M reduction in revenue due to changes in estimates for prior-period cash collections. This represents a systemic breakdown in the revenue cycle.
EBITDA Guidance Suspension and External Intervention
Decelerating. Management outright suspended its prior FY26 Adjusted EBITDA guidance of $37-$49M, citing Q2 underperformance and new 'strategic initiatives.' Furthermore, they hired a 'leading professional services firm' to execute 'Project Ascend,' aimed at increasing efficiency and evaluating the product portfolio. Bringing in outside consultants to rationalize the portfolio mid-year signals deep internal operational distress and a loss of financial visibility.
Prenatal Turnaround Fails to Materialize
Decelerating. In Q1, management claimed the Prenatal segment was stabilizing and deployed a newly dedicated prenatal sales team to drive a turnaround. The data directly contradicts this positive narrative: Q2 Prenatal volume fell 9% YoY and revenue collapsed 16% YoY to $39.8M. The active 'rebuild phase' is failing to offset market share losses.
Macro Headwinds: Hostile Payer Environment
Management explicitly cited 'increased payer friction' as a primary driver of the revenue shortfall. This points to a broader macro environment where managed care organizations are aggressively scrutinizing molecular diagnostic utilization, delaying prior authorizations, or denying claims, resulting in rising no-pay rates and forced receivable write-downs.
Cancer Care Continuum Volume Demonstrates Clinical Utility
Stable. Stripping away the severe pricing issues, the underlying clinical demand for Myriad's oncology products remains solid. CCC volume grew 6% YoY to 95,000 tests. The expanded sales team's efforts in hereditary cancer screening are sustaining order flow, even if the revenue cycle team cannot effectively monetize it.
FirstGene Commercial Launch
Accelerating. In July 2026, Myriad formally launched the FirstGene Multiple Prenatal Screen. The test uniquely combines four prenatal genetic screens from a single blood draw as early as eight weeks gestation. If successful, this product is critical to reversing the steep multi-quarter volume declines in the Prenatal Health division.
Precise MRD and Prolaris AI Progress
Stable. The company executed on its pipeline deliverables, officially launching 'Prolaris + AI' in partnership with PATHOMIQ for prostate cancer. Additionally, it expanded the availability of the Precise MRD assay to colorectal and renal cancers and submitted the breast cancer indication to MolDX for Medicare coverage determination. These are critical steps for 2027 revenue generation.
Other KPIs
Cash burn remains an ongoing issue. Operating cash outflow was $7.7M, compounded by $3.2M in CapEx and software capitalization. Cash and equivalents dwindled to $115.2M from $149.6M at the end of FY25. With EBITDA guidance suspended, liquidity runway will become a core focus for investors.
Increased $6.7M YoY, reflecting the company's aggressive hiring of 100+ account executives initiated earlier in the year. The combination of rising fixed commercial costs and suddenly contracting revenue creates severe negative operating leverage, directly causing the $38.9M operating loss.
Guidance
Reversing. This represents a drastic cut from the $860-$880M guidance reaffirmed just one quarter ago. At the midpoint ($780M), it implies a 5.4% YoY decline compared to FY25's $824.5M, completely destroying the previous narrative of achieving high single-digit growth.
Decelerating. Lowered from the prior guide of 68%-69%. This explicitly acknowledges that the severe ASP compression and payer friction witnessed in Q2 are structural headwinds that will persist through the second half of the year.
Decelerating. Previously guided at $37-$49M, management has entirely withdrawn this metric. This is the clearest indication that the combination of revenue shortfalls, fixed commercial investments, and restructuring costs via 'Project Ascend' have made near-term profitability unpredictable.
Key Questions
Details of the $11M Cash Collection Adjustment
You cited an $11 million reduction in revenue due to changes in estimates for prior-period cash collections. Which specific quarters and segments did this stem from, and what assurances can you provide that the current receivable book doesn't hold further write-down risks?
Payer Friction Specifics
Can you unpack the 'increased payer friction'? Are payers actively cutting contracted rates, implementing more stringent prior authorization hurdles, or simply denying claims for specific test categories like hereditary cancer?
Project Ascend and Cash Runway
With the suspension of EBITDA guidance and the hiring of outside consultants, how should we think about your monthly cash burn moving forward? Is a capital raise or significant headcount reduction on the table for H2 2026?
Prenatal Sales Force ROI
In Q1, you highlighted the deployment of a dedicated prenatal sales team to drive a turnaround. With prenatal volumes down 9% this quarter, why is that commercial investment failing to yield results, and how long will you fund it before pivoting?