Fulgent Genetics, Inc.

What they do

Fulgent operates a laboratory services business offering anatomic pathology, precision diagnostics including next-generation sequencing for rare disease, hereditary cancer and reproductive health, oncology testing, and BioPharma services for pharmaceutical and biotech customers. It also runs a consumer-initiated telemedicine platform called Picture. Through Fulgent Pharma, acquired in 2022, it develops cancer product candidates using a nanoencapsulation drug delivery platform.

Revenue drivers

• Laboratory services (diagnostics and pathology) — The core revenue base, spanning comprehensive anatomic pathology, precision diagnostics (NGS tests for rare disease, hereditary cancer, reproductive health), specialized oncology services, and BioPharma testing and licensing; the 10-K does not break out a separate revenue figure for this segment.
• Picture telemedicine platform — A patient-initiated testing platform that lets consumers order tests and access clinical support; no standalone revenue figure is disclosed.
• Therapeutic development (Fulgent Pharma) — Pre-revenue pipeline business developing FID-007 and FID-022 with a nano-drug delivery platform; the company guides to $26 million of spend on this business for full year 2026.

Recent performance

Second quarter 2026 revenue was $85.4 million, up 20.1% sequentially from $71.1 million in Q1 2026 and up 4% from $81.8 million in Q2 2025. Cost of revenue rose 26% year over year to $59.7 million, cutting GAAP gross profit 25% to $25.7 million (30.1% gross margin). GAAP loss was $29.5 million, or $(1.05) per share, with adjusted EBITDA loss of $17.1 million. First-half 2026 revenue of $156.5 million was roughly flat versus $155.3 million in the prior year, while the operating loss widened 79% to $70.7 million.

Strategy

Fulgent describes a long-term vision of transforming from a diagnostics business into a fully integrated precision medicine company, pairing laboratory services with its Fulgent Pharma therapeutic pipeline. It is investing in digital pathology and AI tools, stating it is seeing improved efficiency and quality from those tools. In Q2 2026 it bought back approximately 1.5 million shares for $23.8 million, and 4.1 million shares year to date. Management also cited Phase 2 data for FID-007 presented at the 2026 ASCO meeting and progress in both FID-007 and FID-022 trials.

Risks

• Revenue cycle management transition — Management attributed its lowered 2026 revenue guidance to processing delays affecting collection rates during the final phase of its revenue cycle management and billing system transition.
• Cash burn and persistent losses — Operating cash flow turned negative at $(101.6) million in 2025, and the company reported a $29.7 million net loss in Q2 2026 alone.
• Gross margin compression — Cost of revenue grew 26% year over year in Q2 2026 against 4% revenue growth, reducing gross profit by 25%.
• Pipeline and reimbursement dependency — Fulgent Pharma candidates FID-007 and FID-022 remain in clinical development and generate no revenue, and diagnostic revenue depends on payer collection and the tax refund timing the company flagged as delayed by IRS constraints.

Outlook

For full year 2026, Fulgent revised guidance to revenue of $330.0-$340.0 million, with a non-GAAP loss of approximately $63.0-$67.0 million, or $2.22-$2.35 per share. It expects to end the year with approximately $610.0 million of cash, cash equivalents, restricted cash and marketable securities, assuming receipt of about $106.1 million in tax refunds before December 31, 2026, capital purchases of $12 million, no further repurchases, and $26 million of therapeutic development spend. Management said it is working to remedy the billing-related collection issue and expressed confidence in the business.