Personalis (PSNL) Q3 2026 earnings review
Personalis cancer test sales jump, but overhead costs double
Personalis, a maker of blood tests that track cancer, is finally getting paid by Medicare while its overhead costs double. Total sales jumped 77% from a year ago to $26 million as clinical test volume tripled and government DNA sequencing rebounded. Gross margin nearly doubled, but operating losses widened to $36 million because selling and administrative costs doubled. Because chief executive Chris Hall agreed in July to sell the business to Tempus AI, the company gave no financial outlook.
| Revenue | $25.6M +77% from a year ago |
|---|---|
| Clinical test volume | 13,157 +200% from a year ago |
| Gross margin | 25.7% 13.2% a year ago |
| Full-year outlook | Withdrawn pending Tempus AI merger |
⚖️ Verdict: 🟢 Bullish
The story got better because Medicare coverage is now turning unpaid hospital tests into cash. Average revenue per clinical test rose to $332 by our math, lifting gross margin by 12.5 percentage points from a year ago. One caution: excluding a related partner, drug-trial testing sales fell, and overhead costs equalled all of the quarter's revenue.
The question now is how much of the overhead jump came from one-time merger bills versus ongoing sales costs. If deal fees caused the jump, underlying cash burn is improving as Medicare pays for more tests; if sales costs caused it, growth still requires heavy spending. The quarterly filing's expense breakdown will settle this.
🐂 Bull Case
Medicare Coverage Lifts Clinical Revenue and Gross Margin
Personalis runs NeXT Personal, a blood test that checks if a patient's cancer has returned after treatment. For over a year, the company gave away most of these tests without payment while waiting for government insurance approval. That wait is ending because Medicare now pays for four cancer uses, so paid tests are lifting profit margins.
The genomics group delivered 13,157 clinical tests this quarter, triple the number from a year ago. Clinical revenue reached $4.4 million, up from $0.4 million last year, thanks to "a full quarter of Medicare covered IO test volume, in addition to revenue from breast and lung cancer covered tests", the company said.
- Revenue per clinical test: $332 by our math, up from $245 last quarter and $88 a year ago
- Gross margin: 25.7% by our math, up 12.5 percentage points from 13.2% a year ago
- Cost of making the tests: 74.3% of revenue, down from 86.8% a year ago
What to watch: average revenue per clinical test in the fourth quarter. A higher figure will show that Medicare collections are catching up with the growing number of tests doctors order.
VA Sequencing Rebound Boosts Core Revenue
Outside of hospital clinics, Personalis sequences DNA for the Department of Veterans Affairs Million Veteran Program (VA MVP), a government research project. Orders from this programme arrive in uneven batches, and last year's third quarter had almost no work. This quarter, government sequencing returned and helped lift total company sales by 76.6% to $25.6 million.
Population sequencing revenue reached $4.1 million, up from $0.2 million a year ago and $3.0 million last quarter. Because the government orders in large blocks, this revenue stream provides cash to fund the business, even though it does not grow in a straight line every quarter.
What to watch: population sequencing sales in the fourth-quarter report. Another quarter near $3 million to $4 million would show steady government task orders before the Tempus merger closes.
🐻 Bear Case
Doubled Overhead Costs Widen Operating Losses
"These results reflect the strength of our team’s execution and commitment to helping transform the active management of cancer through more informed care," chief executive Chris Hall said. While sales and gross margin improved, the company spent much more on overhead and commercial partner fees, so its total losses grew larger.
Selling, general and administrative expenses — sales and overhead costs — doubled from a year ago to $26.0 million. By our math, that single expense line equalled 101.6% of total revenue, up 11.7 percentage points from 89.9% a year ago, and included $4.8 million paid to commercial partner Tempus. As a result, the operating loss widened from $23.3 million to $35.5 million.
What to watch: selling and administrative expenses in the upcoming quarterly filing. The filing's footnote will show how much of the $13.0 million increase came from one-time legal bills for the Tempus merger versus permanent sales costs.
Non-Related Pharma Revenue Shrank From a Year Ago
Drugmakers pay Personalis to test patient samples during clinical trials for new cancer medicines. On the surface, revenue from pharma testing services grew 30.3% from a year ago to $17.1 million, making it the company's largest business line. However, a closer look at the footnotes shows that one related-party partner accounted for more than all of that growth.
Related-party pharma revenue jumped from $1.1 million a year ago to $5.9 million this quarter. Excluding that partner, pharma testing sales to all other drugmakers fell 6.8% from a year ago, dropping from $12.0 million to $11.2 million by our math. That means demand from outside drug companies has not yet picked up.
What to watch: non-related pharma revenue in the fourth quarter. A return to growth is needed to prove that outside drugmakers are ramping up their trial testing.
👓 Other Themes
New Variant Tracker Expands Cancer Test Capabilities
Personalis commercially launched its Real-Time Variant Tracker, an optional add-on report for its NeXT Personal cancer blood test. The feature helps doctors "identify clinically relevant resistance and therapeutically targetable variants over time, during NeXT Personal testing", the company said. The oncology group also released study results in breast cancer and immunotherapy showing its tests spot cancer DNA at low levels.
Pending Tempus Merger Ends Public Financial Outlooks
In July 2026, Personalis agreed to merge with healthcare data company Tempus AI. "Combining with Tempus gives us the scale, complementary capabilities and resources to accelerate innovation and deliver even greater value to patients, clinicians, and biopharma partners," Hall said. Because of the pending buyout, the company no longer gives financial forecasts or holds quarterly conference calls.
💲 Other KPIs
Cash and marketable securities fell by $22.1 million from $212.7 million last quarter, by our math. The cash balance has dropped each quarter this year from $240.0 million at the end of 2025 as Personalis funds its operating losses and lab equipment purchases.
Contract liabilities — cash customers have paid upfront for testing services not yet delivered — fell 51.5% from $3.40 million last quarter, by our math. After rising in the first half of the year, the balance returned near the $1.56 million level recorded at the end of 2025 as Personalis completed prepaid testing work.
Weighted-average diluted shares rose 20.9% from 88.7 million a year ago, and ticked up 1.7% from 105.4 million last quarter, by our math. The higher share count comes from stock sales completed over the past year to raise cash, which spread the company's net loss across more shares.
🔮 Guidance
Withdrawn. "As a result of the announcement on July 20, 2026, that Personalis and Tempus AI, Inc. have entered into an Agreement and Plan of Merger, Personalis will no longer provide financial guidance or conduct a quarterly earnings conference call." Through the first nine months of 2026, revenue reached $63.4 million and clinical sales reached $8.3 million.
❓ Key Questions
How much of the overhead jump came from merger fees?
Selling, general and administrative expenses rose by $13.0 million from a year ago to $26.0 million. Because Personalis did not hold a conference call, readers cannot yet tell how much of that increase came from one-time legal and advisory bills for the Tempus buyout.
How many doctors ordered NeXT Personal tests this quarter?
In the second quarter, Personalis reported that 1,400 doctors ordered its cancer blood test, up from over 1,000 in the first quarter. The third-quarter release omitted this number, leaving open whether test growth came from new doctors or deeper use by existing ones.
Why did pharma testing sales to non-related customers decline?
Excluding $5.9 million from a related party, pharma testing revenue fell 6.8% from a year ago to $11.2 million by our math. Earlier this year, executives said large drug-trial contracts would ramp up in the second half.
What share of clinical tests is now covered by Medicare?
Medicare coverage for immunotherapy monitoring ran for a full quarter alongside breast and lung cancer coverage, lifting revenue per test to $332 by our math. Knowing the exact share of paid tests would show how much room remains for gross margin to rise.