BillionToOne, Inc.

Good day and thank you for standing by. Welcome to the Billion to One Second Quarter 2026 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised, today's conference is being recorded. I would now like to turn the conference over to your speaker today, Gabby Gable, Investor Relations. Please go ahead.

Good afternoon, everyone. Thank you for participating in today's conference call. Joining me on the call from BillionToOne, we have Oguzhan Atay, co-founder and chief executive officer, and Ross Taylor, chief financial officer. Earlier today, BillionToOne released financial results for the second quarter ended June 30, 2026. A copy of the press release is available on the company's website. Before we begin, I want to remind you that during this call, we may make forward-looking statements within the meaning of federal securities laws. Such statements about future events may include statements about our financial outlook and performance, market size, our products and services, reimbursement coverage, future clinical performance, and other similar statements. We caution you that such statements reflect our current best judgment and actual results may differ materially from those expressed or implied in any forward looking statements. Risk factors that may cause our results to differ are discussed in our filings with the SEC, including our previously filed annual report on Form 10-K, our quarterly report on Form 10-Q to be filed following this call, and the current report on Form 8-K filed today. Any forward-looking statement made during this call is made as of today, August 5, 2026. If this call is replayed or reviewed after today, the information made during this call may not contain current or accurate information. BillionToOne disclaims any obligation to publicly update any forward-looking statements, whether because of new information, future events, or otherwise, except as required by law. And with that, I will turn the call over to Ozan.

Good afternoon, everyone. Thank you for joining our second quarter 2026 earnings call. I would like to start by thanking our patients and providers who trust us with incredibly important healthcare decisions and our employees who show up every day with tremendous effort to build and deliver superior tests that improve our patients' care and remove the fear of the unknown. Before diving into our quarterly results, I would like to remind you of the four pillars that I believe make us a different category of molecular diagnostics company. The first pillar is our revolutionary technology platform enabled by our patented QCT quantitative counting template technology. Our technology achieves single molecule level sensitivity and precision with next generation sequencing. This has allowed us to build unique category-defining products in both prenatal and oncology. In turn, in our second pillar, our products have allowed us to scale rapidly from zero to $438 million in annualized revenue run rate in six years. But we believe we are still in the early days, perhaps at less than 1% of what is possible. as we believe prenatal and oncology cell-free DNA testing can exceed an estimated $100 billion in the United States alone. Importantly, in our third pillar, with the higher signal-to-noise advantage that our unique technology offers us and with our relentless focus on COGS reductions and ASV growth, we have been able to couple our rapid growth with a superior gross margin profile. We now have margins above 70% with still significant room for expansion through ASV growth and COGS per test reductions. Finally, this superior gross margin, combined with a culture of fiscal discipline and efficient operations incorporating AI, has allowed us to achieve GAAP profitability. We have done this at a much lower scale than our public competitors with an accumulated deficit that is approximately 10% of theirs. In summary, we continue to track toward our long-term goal, which has remained the same, to build a category-defining generational company. transformed molecular diagnostics and the standard of care for millions of patients and become a member of the S&P 500. Our second quarter performance was strong across all pillars as we delivered another quarter with high growth, excellent margins, and positive operating income and cash flow. I will cover each pillar in more detail, but to summarize, we are launching new products both in prenatal and oncology, and we have published data that we believe will support Moldex coverage for North Star Response. Our rapid growth continued with test volume up 35% year-over-year and revenue up 64% year-over-year. We maintained our superior gross margin profile, which was 70.5% in the quarter, an expansion of 5 percentage points year over year. Our gross margins stayed remarkably consistent in the past few quarters, despite an increase in COGS per test, as our mix shifts toward a higher proportion of oncology tests. And lastly, even as we accelerated our investments in commercial scale and R&D, we maintained a strong level of profitability, achieving $5.5 million of GAAP operating income, a 5% operating margin, and a remarkable 15% adjusted EBITDA margin. As a result, we increased our cash position to $549 million at the end of the quarter. Let me take you through the quarter, pillar by pillar. Starting with our first pillar, our platform and products. In prenatal, UnityConfirm has seen strong adoption following the launch on May 28. As a reminder, it is the first and only non-invasive confirmation assay for high-risk pregnancies. It captures and sequences intact circulating fetal cells to provide 100% fetal fraction, a fundamentally different category from conventional cell-free DNA tests. We launched it as a specialized follow-on for high-risk pregnancies identified on our unity aneuploidy screen. UnityConfirm gives patients who cannot or choose not to proceed to invasive diagnostic testing a non-invasive option they didn't have before, at a sensitive time when options may feel limited. The early reception of UnityConfirm has been exceptional. Providers are already ordering UnityConfirm on more than 50% of their eligible high-risk unity aneuploidy patients. We also continue to enroll patients in what we believe is the largest prospective circulating fetal cell-based study ever conducted. In the meantime, UnityConfirm is opening doors even to no-see health systems that typically do not allow any sales reps. We expect its long-term impact for the Unity franchise to be significant, especially as future readouts from the study mature and it is established as the next paradigm in non-invasive testing. But our prenatal product engine did not stop there. On August 17, we are expanding our Unity Fetal Risk Screen to 130 genes, the largest panel on the market that doesn't rely on partner testing, by far leapfrogging competitive offerings. Approximately 50% of all providers prefer large panels for these inherited conditions. So we believe that this expansion will meaningfully increase our serviceable market. The panel screens for prevalent, actionable conditions selected from ACOG, ACMG, and RUST guidelines, and it reinforces Unity's position as the leader in cell-free DNA testing for recessive conditions. Turning to oncology, we generated important new clinical evidence this quarter. On June 24, we published a peer-reviewed study in the Journal of Liquid Biopsy validating North Star response for monitoring immunotherapy and immunocombination therapy. This study included 142 patients and more than 750 samples across two prospective cohorts and 12 tumor types. Molecular progression strongly predicted worse survival, notably a stronger predictor than imaging alone and stronger still when the two are combined. The test also separated radiographically stable patients into true responders and non-responders, further demonstrating value over standard of care imaging. This publication is designed to support our pursuit of Moldiacs Medicare coverage for NorthStar response in the IO and IO combination therapy settings. Since response accounts for almost two-thirds of our oncology test volume, this coverage remains one of our most meaningful catalysts and is still expected by the end of this year. Speaking of catalysts, we remain on track for our highly sensitive tumor-naive MRD launch by the end of the year as well. It is important to note that our liquid biopsy assays have a QC failure rate below 1% compared to 15 to 30% typical of assays that require tissue sequencing. We are also updating North Star Select on September 1st in two important ways. First, we are expanding the panel to 102 genes to cover recent and upcoming FDA therapy approvals, including the highly sensitive detection of MTAB copy number loss. MTAP loss is present in approximately 15% of all cancer patients and is the target of several promising ongoing clinical trials. As we previously discussed, copy number losses are extremely difficult to detect in liquid biopsy, a problem that our technology resolves. Second, we are launching NorthStar Origin, A tissue of origin add-on which we believe will deliver best-in-class performance with higher call rates than any similar offering. Roughly 3% of patients present with cancer of unknown primary, which results in a lack of effective therapy options. Moreover, the percentage of patients with uncertain diagnoses can reach 10% in community oncology settings, especially when they do not have access to detailed pathology workups. Northstar Origin uses QCT-based molecular counting of methylation to deliver 91% top 3 and 86% top 1 accuracy in identifying the tissue of origin, helping these patients get to a diagnosis and effective therapy. Turning to our second pillar, scalable rapid growth. In the second quarter, total test volume grew 35% year-over-year to approximately 196,000 tests, up approximately 8,000 sequentially. Our growth was in line with our expectations for prenatal and above expectations for oncology. Importantly, we added approximately 70 sales representatives in the first half of the year, ahead of our plan given the strength of our hiring pipeline. While this rate of hiring did have some impact on our short-term sales productivity, we expect our hiring to translate into faster growth exiting the year and into the early part of the next year. as these representatives become fully productive and penetrate the health systems, especially as these health systems also become EMR integrated. Speaking of EMR integrations, we launched on Epic's Aura platform in under five months, a record speed for any laboratory to launch on Epic Aura, and completed our first Aura health system integration in just two weeks, from start to first test order. Epic Aura removes a critical barrier to health system adoption. It will still take time to convert health systems, since each health systems IT team must slot our integration into a roadmap that is often two to four quarters out. But we expect the impact to be meaningful as we enter next year. Given how quickly our oncology tests are scaling, we also signed the lease for a dedicated 62,000 square foot oncology production lab directly across from our existing prenatal production lab in Union City, California. Design and build out are underway with production expected by the end of 2027 and the facility is designed to support oncology capacity of approximately 5,000 tests per day over time. Looking at each product line, both prenatal and oncology contributed meaningfully to our growth. Prenatal revenue in the second quarter was $95.8 million, up 56% year-over-year, driven by strong commercial execution and rising ASPs. Oncology was even faster, with its revenue growing 176% year-over-year nearly three times to $13.7 million, an annualized revenue run rate of approximately $55 million. Our total revenue performance in the quarter demonstrates the remarkable growth we have delivered in the last six years, rising from approximately zero to $438 million in annualized run rate. Total revenue was $109.4 million in the quarter, representing 64% year-over-year growth, driven by strong year-over-year increases in both test delivered, up 35%, and ASB, up 21%. I would note that while reported revenue was only slightly up sequentially, that understates our underlying momentum. Excluding true up revenue, total revenue grew 8% sequentially, quarter over quarter. The sustained level of growth continues to be an important part of our pillars. Moving to our third pillar and starting with our ASBs. Overall, ASV increased 21% year-over-year to $551 per test. ASV did decline about $20 sequentially, but this is simply a result of true-op timing. True-op was $49 per test in the first quarter versus $14 per test in the second quarter. Importantly, excluding the TrueOps impact, ASV has increased $15 quarter over quarter. During the quarter, through a mutual agreement, we held more than $10 million of claims while waiting for the in-network implementation of our codes by national payers. This had a temporary impact on cash collections, slightly impacted the ASBs that we could realize, and potentially reduced the true-op revenue for the quarter. We expect this to resolve through the second half of the year as these claims are processed and paid. The more important underlying signal is this. Excluding TrueUp, overall ASV continued to increase sequentially, driven by a record number of payer contracts signed in the quarter. In addition to driving ASV growth, we have remained committed to our operating philosophy of continuous improvements to reduce COGS per test. Overall Cogsworth test was $161 in the second quarter, up from $152 in the first quarter and $156 a year ago, with the increase driven by the shift in our volume mix towards oncology. Underneath that mixed effect, the operational discipline is very much intact. Prenatal COGS was approximately flat sequentially, even with the unity-confirmed launch, and we achieved COGS reductions of more than 10% quarter over quarter in oncology. As oncology continues to grow faster than prenatal, we expect overall COGS per test to rise gradually over time. As a result, our gross margin held at 70.5% in the second quarter, approximately 5 percentage points higher year over year, driven by higher ASPs, even as our earlier stage lower margin oncology tests grew more than 100% during this same period. Importantly, small quarter-over-quarter differences in gross margin over the past four quarters are almost entirely attributable to quarterly true-op differences. Excluding true-op, our gross margin has been remarkably stable at around 70%, even with the significant mixed shift towards oncology. By continuing to drive ASP increases across both prenatal and oncology, and by continuing to reduce COGS in oncology, we expect to maintain strong gross margins at or above 70%, even as oncology becomes a much bigger part of our overall business. With that, I will turn the call over to Ross to review our financial results and guidance before I conclude.