Fulgent Genetics Q3 Revenue Rises 8% as Pathology Business Expands

Fulgent Genetics reported an 8% year-over-year increase in third-quarter 2026 revenue, supported by growth in anatomic pathology and BioPharma services, while lower precision diagnostics revenue remained a drag on year-to-date performance. The genetic testing company maintained full-year revenue guidance of $330 million to $340 million and expects to end 2026 with approximately $630 million in cash, cash equivalents and marketable securities.

Third-quarter revenue rose to $90.4 million from $84.1 million a year earlier and increased from $85.4 million in the second quarter. Revenue for the 12 months ended September 30 reached $330.3 million, up 5% from $315.5 million in the comparable prior-year period. Fulgent generated $14 million of operating cash flow over the latest 12 months.

Profitability remained below the prior-year level despite improving sequentially. GAAP gross profit was $31.9 million, representing a 35.3% gross margin, compared with $35.5 million and 42.2% in the third quarter of 2025. The latest margin was higher than 30.1% in the second quarter of 2026. Non-GAAP gross profit, which adds back equity-based compensation recorded in cost of revenue, was $32.8 million, with a margin of 36.3%. That compared with $37.2 million and 44.3% a year earlier.

Pathology Growth Offsets Precision Diagnostics Decline

Revenue for the first nine months of 2026 totaled $246.9 million, up from $239.3 million in the prior-year period. The business mix shifted toward anatomic pathology, where revenue increased 30% to $103.5 million. BioPharma services revenue rose 13% to $19.9 million.

Those gains offset a 13% decline in precision diagnostics revenue, which fell to $123.5 million from $142.2 million. Precision diagnostics remained the company’s largest revenue category, supported by a testing platform covering more than 18,400 single-gene tests and over 900 panels, with all testing volume processed in-house.

Fulgent continued integrating Bako and StrataDx, pathology businesses acquired on March 17, 2026, for an adjusted purchase price of $56.4 million. The transaction added laboratories in Georgia and Massachusetts, expanded Fulgent’s dermatopathology capabilities and nearly doubled its pathology sales-force headcount. The company plans to apply Eziopath, its proprietary artificial-intelligence imaging system, to automate pathology workflows and support diagnostic accuracy.

The diagnostics business is also expanding in hereditary cancer, cardiovascular genetics, reproductive health and neurodegenerative genetics. Fulgent recently launched an ultra-rapid whole-genome sequencing test designed for critically ill infants in neonatal and pediatric intensive-care units, with a preliminary-report turnaround time of 38 to 48 hours.

Full-Year Outlook and Capital Plans

For 2026, Fulgent expects total revenue of $330 million to $340 million, representing growth of 2.3% to 5.4%. The company projects precision diagnostics revenue of $161 million to $165 million, anatomic pathology revenue of $146 million to $150 million and BioPharma services revenue of $23 million to $25 million.

Fulgent also expects a full-year non-GAAP loss of $1.65 to $1.75 per share. Its year-end liquidity projection of approximately $630 million assumes $13 million of capital purchases, $21 million of spending on therapeutic development and no additional share repurchases. The company noted that cash expenditures could vary because of potential repurchases, acquisitions or other spending outside ordinary operations.

Management’s broader strategy combines organic expansion, partnerships and disciplined acquisitions while continuing to invest in the diagnostics platform and clinical-stage oncology pipeline. Fulgent reported $1.1 billion in total assets, providing financial capacity for those initiatives.

Oncology Pipeline Advances With Safety Risks Still Material

Fulgent’s lead drug candidate, FID-007, is based on its proprietary Clean Chemo nano-drug delivery platform. Interim data from an ongoing Phase 2 open-label study evaluating FID-007 with cetuximab in recurrent or metastatic head and neck squamous cell carcinoma showed a 61.9% objective response rate among 42 efficacy-evaluable patients. The disease-control rate was 85.7%.

In the intent-to-treat population of 46 patients, median progression-free survival was 6.67 months and one-year overall survival was 63.4%. Median overall survival was not yet mature. Fulgent described the safety profile as manageable and reported no infusion-related reactions or Grade 3 or higher peripheral neuropathy. The company has proposed a 125 mg-per-square-meter dose for a Phase 3 study.

The trial nevertheless recorded substantial adverse events. Grade 3 or higher treatment-emergent adverse events occurred in 80.4% of patients, while 50% experienced a serious treatment-emergent adverse event. Treatment-related events led to an FID-007 dose modification in 65.2% of patients and withdrawal in 4.3%. One patient in Arm B died from treatment-related pneumonia.

Fulgent’s second Clean Chemo candidate, FID-022, remains in a first-in-human dose-escalation study for advanced solid tumors. Dosing has been completed for the first four dose levels, and the company expects to determine a maximum tolerated dose in the second half of 2027.

The outlook remains subject to clinical-development, regulatory and execution risks. Fulgent cautioned that early or interim trial findings may not be replicated in later studies, development timelines may change, and the potential use of the FDA’s 505(b)(2) pathway does not ensure a shorter approval process or commercialization. Financial results could also be affected by acquisition spending, the timing of capital deployment and continued investment in the pre-commercial therapeutics business.