Precipio (NASDAQ:PRPO) used its fourth-quarter and full-year 2025 shareholder update call to highlight what CEO Ilan Danieli described as a “financial and strategic inflection,” saying the company transitioned from consuming cash to becoming self-sustaining with positive cash flow during the year. Danieli also pointed to continued revenue growth, improved gross margin, the exercise of all remaining financial warrants, and the completion of repayment of the Change Healthcare loan as key milestones that helped position the company for a new phase focused more on growth initiatives.
2025 results: revenue growth and improving margins
For fiscal year 2025, Danieli said Precipio delivered $24 million in revenue, representing a 30% increase year-over-year compared to 2024. He attributed the growth primarily to expansion in the company’s Pathology Services division and strengthening demand for specialized cancer diagnostic services and molecular testing technologies.
On profitability trends, Danieli reported that overall gross margin improved to 45% in 2025 from 41% in 2024. He said the improvement was driven by higher case volumes in Pathology Services, a more favorable test mix toward higher-margin work, and ongoing operational efficiency efforts.
Pathology Services: “backbone” with capacity for more volume
Danieli characterized Pathology Services as the company’s “operational and financial backbone,” saying the division produced strong organic growth during 2025 through new customer additions and increased testing volume from existing customers. He also noted that this growth was achieved without significant additional capital expenditures or lab staffing increases.
He said the company’s laboratory infrastructure remains below maximum capacity, which allows incremental volume to flow through the system efficiently and support margin expansion and cash generation.
Beyond financial contribution, Danieli argued the division provides a strategic advantage for product development because Precipio operates a full clinical laboratory with direct access to patient samples and a real-world testing environment. This, he said, enables the company to develop, validate, and refine diagnostic products before commercial launch—an integrated setup he believes is uncommon among diagnostics companies.
Products Division: revenue volatility, commercial buildout, and margin swing
Danieli said the Products Division did not grow as expected in 2025, citing two main causes. First, the company experienced “customer operational fluctuations,” where some customers paused testing due to internal issues such as machine downtime or staffing disruptions, including maternity leave. While Precipio added new customers, these pauses created temporary revenue losses that offset some of the growth.
In response, Danieli said the company implemented business continuity measures intended to reduce future disruption-related volatility. He described a new onboarding approach where, at a customer’s selection, Precipio’s own clinical lab can be established as a backup testing facility if the customer experiences an interruption—effectively functioning as a send-out lab to maintain continuity of patient testing and revenue.
The second headwind, Danieli said, was limited sales capacity. He explained that the company had “one senior executive spending part of their time on product sales, plus another junior sales person,” which he said was insufficient for targeted growth. With the business shifting to profitability, he said Precipio strengthened its commercial capabilities toward the end of 2025. Danieli disclosed that in January 2026 the company hired an experienced Chief Commercial Officer and two seasoned business development professionals, moving from “barely one person” to “three dedicated, full-time, and experienced” team members focused on direct sales and distributor relationships.
While acknowledging 2025 performance fell short of expectations, Danieli cited signs of progress, including the return of some customers to full operational volume, new customer wins, and organic expansion from existing customers adopting additional HemeScreen and BloodHound panels. He said the company expects to see the impact of these factors during 2026 and added that once laboratories adopt Precipio’s technology, they tend to stay with it and increase utilization over time.
On Products Division profitability, Danieli said margins were “temporarily impacted” by strategic investments in 2025, including a move to a larger facility and additional manufacturing in the third quarter, resulting in 30% gross margins for the division. However, he reported that in the fourth quarter product gross margin rose to 90%, which he acknowledged as an unusually large jump.
Danieli attributed the fourth-quarter margin spike to a concentrated production run designed to build inventory ahead of two expected disruptions: year-end holiday downtime and equipment maintenance in the first quarter of 2026, which he said could take production machines offline for approximately two to four weeks. By producing significantly more inventory in Q4—inventory intended for both external customers and internal consumption in the clinical lab—the company achieved unusually high manufacturing efficiency. He said he considers 50% gross margin a baseline at current production volume, while the Q4 result illustrates potential scalability as volume grows.
Operational milestones and increased market engagement
Danieli highlighted several operational and commercial accomplishments during 2025, including continued expansion of the HemeScreen and BloodHound platform. He said Precipio published a joint academic study with Memorial Sloan Kettering Cancer Center demonstrating the clinical value of the BloodHound BCR-ABL product, and presented a poster at the Association for Molecular Pathology (AMP) Annual Meeting & Expo in collaboration with Wayne State University on the HemeScreen Cytopenia panel.
He also cited improvements in customer onboarding, expanded manufacturing capacity, and strengthened financial positioning through debt repayment.
On investor relations, Danieli said the company increased engagement with public markets in 2025 after previously remaining “relatively silent.” He reported more than 50 unique interactions with investors, family offices, institutional funds, and analysts. Danieli said the company’s “300% share price appreciation” in 2025 was primarily driven by business performance, but he also credited increased investor engagement as a contributing factor, adding that management plans to continue market outreach.
2026 priorities: product growth and a new AML service concept
Looking ahead, Danieli said the company’s 2026 focus is growing the Products business by accelerating adoption of HemeScreen and BloodHound, converting its pipeline of laboratories into revenue-generating customers, and expanding institutional utilization. He said Precipio expects continued growth in Pathology Services as well, with cash generation supporting reinvestment “primarily into the Products business growth.”
As an example opportunity, Danieli discussed acute myeloid leukemia (AML) testing, saying most hospital laboratories currently send AML samples to external reference labs, which he said typically deliver results in 7–10 days even though AML guidelines require results within 5 days. Danieli said Precipio plans to launch a service combining rapid molecular testing—described as “next day results”—followed by comprehensive analysis five days later, leveraging Pathology Services and the BloodHound AML assay. He said additional details will be announced at launch.
Danieli estimated the U.S. addressable market opportunity for the Products Division at $500 million annually and said that over the next three to five years, the company expects its revenue mix to shift from an approximate 90/10 weighting toward Pathology Services to a more balanced mix between services and products.
About Precipio (NASDAQ:PRPO)
Precipio, Inc is a clinical-stage diagnostics and medical technology company focused on advancing the detection and management of hematologic diseases. The firm develops precision diagnostic solutions that integrate digital morphology, immunophenotyping, and molecular testing to improve the diagnosis of leukemia and related blood disorders. Precipio’s approach is designed to enhance the accuracy and speed of laboratory workflows, helping physicians tailor treatment strategies more effectively.
The company’s core offerings include an automated digital imaging and analysis platform that captures and classifies blood and bone marrow cell images at high throughput.
