ミリアド・ジェネティクス（MYGN）2026年第3四半期決算説明会：ガイダンス引き上げ、出生前事業売却

主なポイント

• 2026年第3四半期の売上高は2億270万ドルとなり、前四半期比で6%増、前年同期比で1%減となりました。検査あたり平均売上高は前四半期比7%増、前年同期比1%増と改善しました。
• 売上総利益率は67.9%に達し、第2四半期から130ベーシスポイント改善しました。ミリアドは調整後EBITDAで530万ドルの赤字、調整後EPSで0.11ドルの損失を計上しました。
• がんケア・コンティニュアム部門の売上高は、検査あたり平均売上高の3%減を検査件数の4%増が補い、前年同期比1%増の1億2,400万ドルとなりました。遺伝性腫瘍検査（HCT）の件数は6%増加しました。
• ミリアドは2026年通期の売上高ガイダンスの中央値を500万ドル引き上げました。新たな予想レンジは7億8,000万ドル〜7億9,000万ドルで、中央値は7億8,500万ドルとなります。
• 同社は出生前ヘルス事業を、直近12カ月間の売上高の1.3倍に相当する現金2億1,000万ドルおよび棚卸資産でラブコープに売却することで合意しました。
• 経営陣は、今回の事業売却により残存事業の売上高成長率が100ベーシスポイント以上、売上総利益率が500ベーシスポイント以上改善するとともに、持続的な黒字化に向けた進捗が加速すると見込んでいます。

主要財務データ

事業および業績の動向

がんケア・コンティニュアム

がんケア・コンティニュアム部門の売上高は前年同期比1%増の1億2,400万ドルとなりました。検査件数は4%増の9万8,000件となった一方、検査あたり平均売上高は3%減少しました。

遺伝性腫瘍検査（HCT）の件数は6%増加し、既発症者および未発症者の双方の集団で拡大しました。未発症者向けのHCT件数は四半期ベースで過去3年間で最高水準に達しました。HCT売上高は前年同期比で6%減にとどまったものの、2026年第2四半期比では9%改善しました。

経営陣は、保険償還の前四半期比での改善について、製品ミックス、支払機関との連携、およびレベニューサイクル施策によるものとしています。これらには、重点的な業務プロセスの改善、AIを活用したワークフローの迅速化、支払機関ごとの市場アクセス戦略などが含まれます。

「プレサイズMRD（Precise MRD）」については、MONSTAR-3試験の中間データにおいて、再発が認められた大腸がん患者の91%が術後1カ月時点でMRD（微小残存病変）陽性であったことが示されました。残りの9%は継続的な検査によって特定されました。経営陣は、乳がんに対する保険償還が2027年上半期に開始され、大腸がんおよび腎がんの保険償還は2027年後半に実現すると見込んでいます。

メンタルヘルス

「ジーンサイト（GeneSight）」の売上高は、検査件数の3%増に支えられ、前年同期比2%増の4,000万ドルとなりました。当四半期中に4万人を超える臨床医が同検査を発注しました。

出生前ヘルス

出生前ヘルス部門の売上高は前年同期比12%減の3,900万ドルとなりました。検査件数は11%減少し、検査あたり平均売上高は1%減少しました。

同事業をラブコープに売却するというミリアドの合意は、がんケア・コンティニュアムへの投資集中を目的としています。本取引の一環として、約500人の従業員がラブコープに移籍する見込みです。

業務変革

ミリアドは、プロセスの近代化、組織設計、生産性、コスト構造に注力する複数年のイニシアチブ「Ascend（アセンド）」の実行を継続しました。経営陣は、Ascendがもたらす期待効果の詳細について、2027年に向けて進展する中で順次公表するとしています。

業績ガイダンス

ミリアドは2026年通期の売上高ガイダンスを、従来の中央値7億8,000万ドルから7億8,000万ドル〜7億9,000万ドルへと引き上げました。修正後の中央値は7億8,500万ドルとなります。

経営陣によると、この上方修正は主に第3四半期の検査あたり平均売上高の好調さを反映したものであり、事業売却発表に伴う出生前ヘルス事業の検査件数軟調の可能性によって一部相殺されています。この見通しには、第4四半期における出生前ヘルス事業の売上高が従来想定より約500万ドル下振れすることが織り込まれています。

事業売却完了後、経営陣は売上高成長率が100ベーシスポイント以上、売上総利益率が500ベーシスポイント以上改善すると見込んでいます。また、2027年中に最終損益の大幅な改善を見込んでいるものの、その具体的な数値目標は開示しませんでした。

売却代金の使途候補としては、負債の返済、社内外の成長投資、事業運営資金の確保、およびMRDなどのがんケア・コンティニュアム施策への資金供給などが挙げられます。

リスクと注視すべきポイント

• HCTの保険償還に対する下押し圧力は、契約料金の引き下げや医療保険ポリシーの変更ではなく、主に支払いゼロ請求や支払い拒絶の増加に起因しています。
• 経営陣は、HCTの検査あたり平均売上高について、各年によって変動はあるものの、中長期的に年平均1%〜5%の低下傾向に直面し、足元では3%〜5%寄りに推移していると予想しています。
• 支払機関による事前承認要件や診療記録の開示請求は、保険償還の摩擦を高め、四半期業績の変動要因を拡大させる可能性があります。
• 第3四半期の出生前ヘルス事業の検査件数は11%減少し、2026年の業績見通しでは売却発表に伴うさらなる軟調の可能性を織り込んでいます。
• 経営陣は、「プロラリス（Prolaris）」の検査件数が、生検前に特定の状況下で血液バイオマーカー検査および画像診断を推奨するNCCNガイドラインの影響を受けたと考えています。
• 「プレサイズMRD」の検査需要については、保険償還体制が確立されるまで慎重に管理される方針です。

アナリスト質疑応答の要点

アナリストの関心は、遺伝性腫瘍検査の保険償還状況、第4四半期の業績ガイダンス、および事業売却後の同社の財務プロファイルに集中しました。

経営陣は、HCTの価格下落圧力が契約再交渉や契約償還率の引き下げではなく、主に支払い拒絶や支払いゼロ請求を反映したものであると説明しました。同社は、レベニューサイクル改善の初期の成果が第3四半期の検査あたり平均売上高の前四半期比での回復に寄与したとしつつも、依然としてさらなる取り組みが必要であると述べました。

2026年の見通しに関して、経営陣は第3四半期の業績が想定を約1,000万ドル上回ったものの、その押し上げ効果の約半分は第4四半期の出生前ヘルス事業の検査件数に関する慎重な前提によって相殺されたと述べました。

事業売却後の戦略について、経営陣はがんケア・コンティニュアムへの投資、Ascend関連の効率化、保険償還の適正化、および負債返済の可能性を強調しました。2027年のより詳細な収益性目標は、正式なガイダンス発表時に提示される見通しです。

決算説明会トランスクリプト（全文）

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good day, and thank you for standing by. Welcome to the Myriad Genetics Third Quarter 2026 Financial Earnings Conference Call. [Operator Instructions]

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Matthew Scalo. Go ahead.

Matthew Scalo

Good afternoon, and welcome to the Myriad Genetics Third Quarter 2026 Earnings Call. During the call, we will review financial results we released today, and afterwards, we will host a Q&A session. Our earnings release was issued this afternoon on Form 8-K and can be found on our website at investor.myriad.com.

I'm Matt Scalo, Senior Vice President of Investor Relations. And on the call with me today are Sam Raha, our President and Chief Executive Officer; and Ben Wheeler, our Chief Financial Officer. Joining for Q&A will be Vishal Sikri, Executive Vice President of Commercial; and Mark Verratti, our Chief Operating Officer.

This call can be heard live via webcast at investor.myriad.com, and a recording will be archived in the Investors section of our website, along with the slide presentation. Please note that some of the information presented today contains projections or other forward-looking statements regarding future events or the future financial performance of the company.

These statements are based on management's current expectations, and the actual events or results may differ materially and adversely from these expectations for a variety of reasons. We refer you to the documents the company files from time to time with the SEC, specifically the company's annual report on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K. These documents identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements. I'll now turn the call over to Sam.

Samraat Raha

Thanks, Matt. Good afternoon, everyone, and thank you for joining us. I want to start by welcoming Vishal Sikri to our earnings call. Vishal joined Myriad in 2025 as our SVP of Product and was recently promoted to Executive Vice President of Commercial, where he is now overseeing sales, marketing and product. Vishal has a deep understanding of molecular diagnostics and oncology as well as extensive business and commercial leadership experience. As Matt mentioned, Vishal is here in the room and available to participate in the Q&A portion of our call today, along with Mark Beratti.

Before we discuss third quarter results, I want to start by framing the context for the last few months. We understand the key challenges that we've been facing, continued softness in our Prenatal Health business, reimbursement pressure on HCT and financial stability, and we have been taking decisive actions to address the challenges, and I am pleased by the progress we're making on multiple fronts.

To materially strengthen Myriad going forward, we've been advancing our work on a number of initiatives. First, we've done a rigorous review of our product portfolio to determine how to maximize shareholder value and sharpen Myriad's focus. This led to the definitive agreement to divest our Prenatal Health business, which we recently announced.

Next, we have been working on a set of initiatives to address reimbursement pressures. Our increased revenue per test for the Cancer Care Continuum business in Q3 compared to Q2 reflects our team's ongoing work and early progress with payer engagement and revenue cycle efforts.

Next, we have been working on the Ascend initiative, which we introduced on the second quarter call to modernize how we operate as a company to both better serve customers and increase our ability to win in the market while improving productivity, efficiency and our cost structure. This initiative is about optimized processes and organizational design supported by new tools and technologies. We're working on Ascend with a leading consulting firm. And while this is a multiyear initiative, we've already started taking actions. We will share more about Ascend and its expected impact as we move into 2027.

Finally, we've redoubled our focus on business execution and results to ensure we can demonstrate operational, commercial and financial progress on a consistent quarterly basis.

With that, let me dive into our third quarter performance and highlights.

Third quarter total revenue of $202.7 million was supported by growing demand for our Cancer Care and Mental Health offerings with 4% volume growth of Cancer Care Continuum tests and 3% volume growth of our Mental Health test, offset by an 11% decline in the volume of Prenatal Health tests. For average revenue per test, we reported an increase of 1% year-over-year in Q3 compared to a decrease of 9% year-over-year in Q2. In fact, Q3 revenue for HCT test, while down 6% year-over-year, improved 9% sequentially over Q2 of 2026.

The improvement in total average revenue per test reflects test mix and early progress addressing payer friction through enhanced engagement and revenue cycle management initiatives. We outlined a number of these initiatives on our second quarter call, and Ben will share more about this later. While we are pleased with the results from these activities so far, we know that revenue cycle management requires unrelenting attention and engagement as conditions evolve.

And let me reemphasize that HCT remains a highly profitable business line with attractive margins, strong cash generation and significant long-term volume growth opportunities. In terms of profitability, the sequential improvement of revenue per test flows through the P&L. And our gross margin of 67.9% improved 130 basis points compared to Q2, along with a meaningful quarter-over-quarter improvement in adjusted EBITDA of negative $5.3 million and adjusted EPS of negative $0.11.

On October 20, we announced that Myriad has signed a definitive agreement to sell the Prenatal Health business to Labcorp. This is an all-cash deal for $210 million plus inventory, which values this business at 1.3x trailing 12-month revenue.

We are pleased with the outcome and early investor feedback has been unanimously positive as well. I'll speak further to the benefits of this transaction in a moment.

Looking at the full year of 2026, given the steady volume growth of our Cancer Care Continuum and Mental Health tests, along with improving average revenue per test in Q3 over Q2, we are raising the midpoint of our 2026 revenue guidance modestly. Total revenue guidance moves to a range of $780 million to $790 million.

This update reflects conservative assumptions related to Prenatal Health testing volume. Ben will share more on our guidance later. We expect the sale of the Prenatal Health business to unlock significant value for Myriad and our shareholders, resulting in a new Myriad that has materially strengthened financial profile in terms of revenue growth rate, profitability and liquidity.

Working with Labcorp, when the transaction closes, we expect a smooth transition that preserves uninterrupted patient access to our prenatal tests and a good opportunity for our approximately 500 team members who will move to Labcorp to continue serving Prenatal Health care providers. Importantly, the transaction will enable the new Myriad to be even more focused on the sizable attractive Cancer Care Continuum market opportunity.

Now turning to third quarter performance by business. In Q3, the Cancer Care Continuum business generated revenue of $124 million, up 1% year-over-year, reflecting test volume growth of 4% to 98,000 tests being offset by a 3% decline in average revenue per test. HCT volume grew 6% year-over-year with volume growth in both the unaffected and affected population continuing to be strong.

In fact, unaffected HCT in Q3 marked its highest volume record recorded in the last three years. We continue to drive steady volume growth in HCT enabled by a combination of our clinically relevant content, strong market position and improving commercial execution. It's encouraging to see the continued guideline expansion for HCT, including the updates by NCCN earlier this year, including multi-gene panel testing for all patients with endometrial cancer and also for colorectal cancer and gastric cancers regardless of age and family history.

Guideline expansion is expected to continue to support growth in years to come. For prostate cancer, we continue to receive positive feedback on Prolaris + AI, which we launched midyear. However, we believe our volume has been impacted by the NCCN guideline, which recommends blood-based biomarker testing and imaging in certain situations prior to biopsy.

Turning to Precise MRD. We're pleased to report on the latest positive data using our test. At the ESMO conference a couple of weeks ago, our collaboration partner, the National Cancer Center Hospital East presented data on the clinical significance of ultrasensitive MRD testing using our Precise MRD test in the assessment of colorectal cancer patients enrolled in the MONSTAR-3 study.

While the overall study is still maturing, in this interim analysis, 91% of patients who recurred were MRD-positive and Precise MRD 1 month after surgery, higher than has been reported with other assays and previous analyses. Further, the remaining 9% who recurred were identified as positive via serial testing. Approximately half of the post-surgery ctDNA positive results were detected at an ultrasensitive level and 35% of patients who have recurred so far at their first positive detection at an ultrasensitive level.

In essence, this illustrates the power of Precise MRD for earlier detection to help inform medical management and can benefit patient care. We look forward to strong data readouts and additional presentations and publications in 2027. Regarding commercial availability, we have spoken about how we're engaging new customers at early access sites. In fact, just last week, I had the chance to personally meet with some Precise MRD customers to hear their input directly.

For early access, we continue to closely monitor test utilization, customer experience and our internal operational efficiency. We expect Precise MRD reimbursement for breast cancer to begin in the first half of 2027 to be submitted to MolDX this summer. And consistent with past commentary, we would expect reimbursement for colorectal and renal cancer later in 2027. We intend to continue prudently managing testing demand until reimbursement is established.

Turning now to Mental Health. In the third quarter, GeneSight generated $40 million in revenue, up 2% year-over-year on 3% year-on-year volume growth. We continue to expand the ordering provider base, reaching over 40,000 ordering clinicians in the third quarter, and this steady volume growth reflects positive underlying demand and sales performance. We remain disciplined with a strong focus on capital efficiency while delivering growth to GeneSight.

Now moving to our Prenatal Health business. As I've already discussed the announcement of the sale, I'll be brief. In Q3, the Prenatal Health business generated revenue of $39 million, down 12% year-over-year, reflecting a modest decline of 1% in average revenue per death while volume declined 11%. That being said, First Gene Testing volume showed a nice ramp, and we look forward to working closely with Labcorp to provide continuity prenatal testing for health care providers and patients.

Finally, we've used this slide since the beginning of the year to track progress of key actions and milestones, product launches, publications and submissions. The checkmarks show that as we near the last part of the year, we have successfully completed the majority of these important milestones related to HCT, prostate cancer and Precise MRD. And these actions will support our growth in Cancer Care Continuum as we go forward.

With that, I'll turn it over to our CFO, Ben Wheeler.

Ben Wheeler

Thanks, Sam. Let me start by reviewing our third quarter financial results. We reported revenue of $202.7 million, up 6% sequentially and down 1% year-over-year. Overall, test volumes declined 1% sequentially and 2% compared with the prior year period as continued strength in hereditary cancer testing and Mental Health were offset by Prenatal Health.

Average revenue per test increased 7% sequentially and 1% year-over-year, a meaningful improvement from the 9% year-over-year decline we reported in the second quarter. This improvement reflects product mix, a more normalized year-over-year comparison with prior period change in estimate impact to revenue and early progress from our revenue cycle initiatives.

I'll spend a few minutes on that progress in more detail. While we're encouraged by the improvement in Q3, average revenue per test can fluctuate in any particular quarter or year due to a number of factors. Longer term, we continue to expect modest headwinds to Hereditary Cancer Testing average revenue per test, consistent with our prior commentary.

We generated gross margins of 67.9% in the third quarter, up 130 basis points sequentially, but down 200 basis points year-over-year. Sequential growth reflects the improved average revenue per test. Our laboratory operations continue to perform at a high level, reflecting strong operating discipline and efficiency. Adjusted operating expenses were essentially flat sequentially, but increased $10 million year-over-year.

The year-over-year increase reflects targeted investments made earlier in the year to strengthen commercial capabilities. Our capital allocation philosophy remains unchanged. We will continue to prioritize investments with the highest expected returns while maintaining a disciplined focus on operating efficiency and shareholder value creation. Taking all of that into account, we generated an adjusted EBITDA loss of $5 million and an adjusted EPS loss of $0.11 in the third quarter.

As I mentioned, third quarter average revenue per test increased 1% year-over-year, primarily reflecting test mix. Within hereditary cancer testing, while average revenue per test remains below prior year levels, this slide shows the meaningful sequential improvement we saw in the third quarter. We believe this reflects early progress from our revenue cycle optimization and MyRisk reimbursement initiatives.

As we announced last quarter, we're implementing targeted process improvements, AI-enabled workflow acceleration and other capabilities to reduce reimbursement friction. In parallel, we launched a payer-by-payer market access strategy focused on policy engagement, LBM collaboration and reimbursement optimization to strengthen long-term access and support sustainable reimbursement for hereditary cancer testing.

The key takeaway is that we're seeing encouraging early progress addressing reimbursement friction, but there is more work to do. We continue to expect modest pressure on hereditary cancer testing average revenue per test over time, but we believe that we are building the capabilities and processes necessary to navigate an increasingly complex reimbursement environment more effectively.

Next, I'll speak to Myriad's profitability and liquidity. Third quarter adjusted EBITDA was a loss of $5 million, a significant improvement from the second quarter. This sequential improvement was driven by stronger revenue performance and disciplined operating expense management with adjusted operating expenses remaining flat quarter-over-quarter. We remain in a strong financial position. We ended the quarter with approximately $182 million in available capital. This provides us the financial flexibility to invest in our strategic priorities and fund key growth opportunities while maintaining a disciplined approach to capital allocation.

Next, I'll address the recently announced agreement to divest the Prenatal Health testing business. As Sam discussed, we believe this transaction is transformational for Myriad. In 2025, we refreshed our growth strategy and made a deliberate decision to prioritize the Cancer Care Continuum. Since that time, it has become increasingly clear that our prenatal testing business was unable to generate attractive returns in the near term, particularly given recent dynamics in the prenatal market. We, therefore, moved quickly to find what we believe is the best long-term home for this business. This transaction achieves a number of strategic and financial priorities.

First, it sharpens our focus and allows us to prioritize resources and investment on the Cancer Care Continuum, where we believe Myriad has the strongest opportunities to create long-term value.

Second, we expect the transaction to meaningfully improve the financial profile of the remaining company. Importantly, the combination of a stronger growth profile and higher gross margins should accelerate our path to sustainable profitability.

Third, this $210 million plus inventory all-cash deal will significantly strengthen our balance sheet and enhance our financial flexibility. We are evaluating potential uses of the net proceeds, including debt reduction, internal and external growth investments and other general corporate purposes. It is too early to be more specific on capital allocation, but the transaction meaningfully expands our financial flexibility.

Finally, we recognize this transaction affects many of our colleagues, and we do not take that lightly. At the same time, we believe this is the right strategic decision for both businesses and puts Myriad in a more focused, financially stronger and more competitive position going forward.

Next, I'll speak about guidance. Factoring in our solid Q3 performance and our updated outlook for the remainder of the year, we are raising the midpoint of our full year 2026 revenue guidance to $785 million from $780 million. This increase primarily reflects the improvement in average revenue per test we experienced in the third quarter, partially offset by some potential softness in Prenatal Health given the deal announcement. To provide greater insight into the underlying business, we're also providing separate 2026 revenue guidance for Prenatal Health and the Cancer Care Continuum and Mental Health businesses. Now let me turn the call back to Sam.

Samraat Raha

Thanks, Ben. I'd like to conclude by summarizing the key points from this call. The combination of the planned divestiture of the Prenatal Health business, the advancement of our ongoing work to mitigate reimbursement pressures, the implementation and benefits from the Ascend initiative over the midterm and improved operational and commercial execution is setting up the new Myriad to have a materially stronger financial profile, increased predictability and increased focus and intentionality on the Cancer Care Continuum to serve more patients and clinicians and win in the market. We recognize the work ahead.

We are energized by it and the opportunities that will unlock. We are pleased with our Q3 results and look forward to building on that in Q4 as we head into 2027. I'll now pass the call back over to Matt for Q&A. Matt?

Matthew Scalo

Thanks, Sam. And as a reminder, during today's call, we use certain non-GAAP financial measures. A reconciliation of the GAAP to non-GAAP financial results and a reconciliation of GAAP to non-GAAP financial guidance can be found in our earnings release and under the Investor Relations section of our website. Now we are ready to begin our Q&A session. Operator?

Operator

[Operator Instructions]

Our first question comes from the line of Bill Bonello with Craig-Hallum.

質疑応答

William Bonello

Fun to be on a quarter where things are moving in the right direction. Specifically to that, I was hoping to ask sort of a multipart question on hereditary cancer pricing. Just trying to understand a little bit more the dynamic there. So here's sort of the multipart. Is the decline in ASP a function of not getting paid or is it a function of getting paid at lower rates? And if it's the latter, you're getting paid at lower rates, is that something that's resulting from contracts that you're renegotiating? And then let's assume it's that, maybe you can give us some sense of where you are in that contracting cycle, whether most of the big contracts have been negotiated down, if there's still some big ones ahead of us. And then finally, just when you say you expect modest headwinds going forward, can you put some bookends around that? I know you have in the past, but maybe you can remind us.

Samraat Raha

Bill, thank you very much for the question. The multipart question. And again, we are pleased by the early progress that we're making on reimbursement and average revenue per test on HCT. But let me turn it over to Ben to provide you some specifics on your questions.

Ben Wheeler

So Bill, when we're thinking about the softness that we've experienced from an HCT average revenue per test standpoint, that softness is really driven by an increase in 0 pay. So more frequently, we're not getting paid or we're experiencing denials. It's not a byproduct or a result of contract changes or a change in medical policy. And so when we experience variability in ASP, it's generally revenue cycle friction as we refer to it, and that's going to be tied to denials.

And so as Sam said, we're pleased with the early progress that we've seen based on our revenue cycle management optimization initiative. And then we also referenced the MyRisk reimbursement initiative, both on our Q2 call and on our call today. There's lots of work still to be done, but we're happy with the early wins, and we feel like that is what we saw drive the improvement in ASP in Q3.

William Bonello

And in terms of what you're expecting for modest headwind going forward?

Ben Wheeler

Yes. So we frame that as 1% to 5%, maybe more like 3% to 5% in some years. And that's from an average standpoint, Bill. So if you think about it, some years, it may be in excess of 5% like this year. In some years, it might be down 1% or we may even be flat. But generally speaking, in the medium to long term, we would say an average decline of 1% to 5%, maybe skewing 3% to 5% most recently.

William Bonello

Okay. And then just one last follow-up to that. I know that the zero pays are supposed to be a function of what the payer is seeing, whether they think it's an appropriate claim or not. But do you think your price position in the market plays into that at all? And if so, how do you kind of deal with that?

Ben Wheeler

Yes. So Bill, I don't think that it is specific to our price position. I think it's more about the amount of money that people spend in specialty diagnostics and maybe in hereditary cancer testing. And so oftentimes, we'll see as payers are managing their P&Ls, they make changes sometimes in their prior authorization requirements or medical record requests, and that's where we see the increase in denials.

Samraat Raha

One that we had -- sorry, yes, previously, which is what we're seeing is not so different than what the broader industry is seeing. And for example, as ACLA, we collectively are taking some actions to improve on that. But the longer a test is on the market, the more subject it is to various reimbursement pressures. And we have a portfolio which has a number of tests that have been on the market longer. So it's more pronounced perhaps for us at the moment.

Operator

Our next question comes from the line of Kyle Boucher with TD Cowen.

Kyle Boucher

I wanted to start with another question or just a question in general on guidance, sort of what's embedded for the fourth quarter. I think the midpoint of the guide sort of reflects maybe just north of $10 million Q-over-Q decline. But I think if we look across hereditary cancer and GeneSight volume looks pretty good across both of those. So I guess what are the puts and takes there on the fourth quarter? And then just second to that, were there any major out-of-period adjustments this quarter?

Samraat Raha

Kyle, thank you for the question. Ben, these are right up your alley.

Ben Wheeler

So Kyle, when we think about the updated guide, it really is as simple as the two pieces that we called out in the prepared remarks, and that is we were really pleased with the outperformance of, we'll say, about $10 million during Q3. And so if we update the midpoint of our guidance by that Q3 beat and then soften the expectation for prenatal in Q4 as a result of some potential volume softness tied to the deal announcement, that's how we get from a midpoint of $780 million to $785 million off of a $10 million outperform in Q3.

So maybe said differently, maintaining assumptions around Q4 with the exception of softening the volume tied to about half or $5 million worth of prenatal revenue is how it all comes together.

Samraat Raha

I was just going to answer that second question. As it relates to out-of-period or change in estimate to revenue, insignificant for the quarter.

Kyle Boucher

Got it. Okay. Maybe just one more question. Just obviously, much more focused now, your strategic focus on the Cancer Care Continuum. But I guess can you just talk a little bit more about maybe what some of your key areas of focus are post the divestiture of the prenatal business early next year. You said there's a number of different things you guys could do in terms of use of proceeds. Maybe there's no update on that right now. But I guess just sort of how are you thinking about the different options? And I guess, what does the business really look like from a growth and profitability perspective, excluding the prenatal business?

Samraat Raha

Kyle, I'd start by saying, as you can understand, we have been completely heads down focused on the strategic review and the resulting transaction, also the initiatives to improve reimbursement and so forth. So we are now getting deep into 2027 planning, and we're going to have more specifics for you coming up. But that being said then, what color might you add?

Ben Wheeler

So Kyle, in the presentation associated with our prepared remarks, we showed that we expect revenue growth to improve over 100 basis points post divestiture. We also showed that we expect gross margins to increase or improve by greater than 500 basis points. We didn't talk about general profitability. We'll get into more details as we get closer to 2027. We don't want to get ahead of guidance there before we formally communicate that.

But we can say that we expect meaningful progress in 2027 as it relates to bottom line profitability. When we think about a more focused organization, we think about the work that we're doing from an Ascend standpoint and then also those revenue ASP initiatives, those are going to layer in during the year at different points in time. We're excited about what it means and what the organization will look like, but it's not the right time to discuss from a quantification standpoint, what that looks like. But I'll reemphasize that we're excited about the work ahead, the work we've done and what we expect the improvement in profitability profile to look like as we progress through 2027.

Samraat Raha

And then the other question that Kyle had, and I know it was your prepared remarks, but if you can speak to again any thinking we have around the proceeds.

Ben Wheeler

Yes, absolutely. And so we're contemplating use of proceeds across multiple facets or multiple fronts. Part of that will include some level of debt repayment. We're also looking at growth opportunities internally and externally and then naturally just to fund typical operations as we continue to drive for things like MRD and competing in the market in the Cancer Care Continuum in new ways.

Operator

[Operator Instructions] This concludes the Q&A-answer session. I would now like to turn the call back over to Matthew Scalo.

Matthew Scalo

Thanks, Grace. This concludes our earnings call. A replay will be available via webcast on our website for one week. Thank you all for joining us this afternoon, and have a good night.