Castle Biosciences Reports Third Quarter 2026 Results
CASTLE BIOSCIENCES INC (CSTL) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Castle Biosciences Reports Third Quarter 2026 Results Delivered Q3 2026 revenue of $102.9 million, an increase of 24% over Q3 2025 TissueCypher ® test report volume increased 47% over Q3 2025 Raising full-year 2026 revenue guidance to $385-395 million from $365-375 m
How this was made
The 30-second read
Why it matters
The raised guidance reflects strong test volume growth, especially for TissueCypher, and may attract investors seeking exposure to growing diagnostic markets.
Market read
The earnings beat and raised outlook provide a fresh catalyst for CSTL, likely prompting short‑term buying pressure.
What to watch
Potential reimbursement changes for DecisionDx‑SCC could affect future profitability.
Q3 2026 revenue of $102.9 million, up 24% year over year; TissueCypher test reports up 47%; full-year 2026 revenue guidance raised to $385-395 million
Q3 GAAP revenue grew 24% year over year, TissueCypher test report volume grew 47%, and full-year revenue guidance was raised. Offsetting this, the Q3 GAAP net loss widened to $(4,100) thousand from $(501) thousand, nine-month operating cash flow fell to $12,813 thousand from $37,416 thousand, and DecisionDx-Melanoma, DecisionDx-SCC and MyPath test report counts declined in the quarter.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net revenues (GAAP), Q3 2026GAAP | $102.9M | – | 24% |
| Adjusted Revenues (Non-GAAP), Q3 2026non-GAAP | $101.9M | – | – |
| Revenue associated with test reports delivered in prior periods, Q3 2026non-GAAP | −$944K | – | – |
| Cost of sales (exclusive of amortization of acquired intangible assets), Q3 2026GAAP | $23.92M | – | – |
| Gross margin (GAAP), Q3 2026GAAP | $76.87M | – | – |
| Gross margin percentage (GAAP), Q3 2026GAAP | 74.7% | – | – |
| Adjusted Gross Margin (Non-GAAP), Q3 2026non-GAAP | $78.03M | – | – |
| Adjusted Gross Margin percentage (Non-GAAP), Q3 2026non-GAAP | 76.5% | – | – |
| Research and development, Q3 2026GAAP | $15.81M | – | – |
| Selling, general and administrative, Q3 2026GAAP | $63.79M | – | – |
| Amortization of acquired intangible assets, Q3 2026GAAP | $2.10M | – | – |
| Total operating expenses, net, Q3 2026GAAP | $105.6M | – | – |
| Operating loss, Q3 2026GAAP | −$2.73M | – | – |
| Interest income, Q3 2026GAAP | $2.51M | – | – |
| Net (losses) gains on equity securities, Q3 2026GAAP | −$3.42M | – | – |
| Interest expense, Q3 2026GAAP | −$197K | – | – |
| Loss before income taxes, Q3 2026GAAP | −$3.80M | – | – |
| Income tax expense, Q3 2026GAAP | $298K | – | – |
| Net loss (GAAP), Q3 2026GAAP | −$4.1M | – | – |
| Net loss per share, Basic and Diluted (GAAP), Q3 2026GAAP | $(0.13) | – | – |
| Adjusted Net Loss (Non-GAAP), Q3 2026non-GAAP | −$4.1M | – | – |
| Adjusted Net Loss per Share, Basic and Diluted (Non-GAAP), Q3 2026non-GAAP | $(0.13) | – | – |
| Adjusted EBITDA (Non-GAAP), Q3 2026non-GAAP | $12.72M | – | – |
| Stock-based compensation expense, Q3 2026GAAP | $11.23M | – | – |
| Net cash provided by operating activities, Q3 2026GAAP | $19.7M | – | – |
| TissueCypher Barrett's Esophagus test reports, Q3 2026other | 15,574 | – | 47% (test report volume growth as printed) |
| DecisionDx-Melanoma test reports, Q3 2026other | 10,177 | – | – |
| DecisionDx-SCC test reports, Q3 2026other | 3,882 | – | – |
| MyPath Melanoma test reports, Q3 2026other | 798 | – | – |
| DecisionDx-UM test reports, Q3 2026other | 422 | – | – |
| AdvanceAD-Tx test reports, Q3 2026other | 1,109 | – | – |
| Esopredict test reports, Q3 2026other | 469 | – | – |
| Net revenues (GAAP), nine months ended Sep. 30, 2026GAAP | $290.1M | – | – |
| Adjusted Revenues (Non-GAAP), nine months ended Sep. 30, 2026non-GAAP | $293.7M | – | – |
| Gross margin (GAAP), nine months ended Sep. 30, 2026GAAP | $215.4M | – | – |
| Gross margin percentage (GAAP), nine months ended Sep. 30, 2026GAAP | 74.2% | – | – |
| Adjusted Gross Margin (Non-GAAP), nine months ended Sep. 30, 2026non-GAAP | $225.5M | – | – |
| Adjusted Gross Margin percentage (Non-GAAP), nine months ended Sep. 30, 2026non-GAAP | 76.8% | – | – |
| Research and development, nine months ended Sep. 30, 2026GAAP | $44.78M | – | – |
| Selling, general and administrative, nine months ended Sep. 30, 2026GAAP | $194.8M | – | – |
| Amortization of acquired intangible assets, nine months ended Sep. 30, 2026GAAP | $6.58M | – | – |
| Total operating expenses, net, nine months ended Sep. 30, 2026GAAP | $314.3M | – | – |
| Operating loss, nine months ended Sep. 30, 2026GAAP | −$24.21M | – | – |
| Net loss (GAAP), nine months ended Sep. 30, 2026GAAP | −$20.68M | – | – |
| Net loss per share, Basic and Diluted (GAAP), nine months ended Sep. 30, 2026GAAP | $(0.69) | – | – |
| Adjusted Net Loss (Non-GAAP), nine months ended Sep. 30, 2026non-GAAP | −$20.68M | – | – |
| Adjusted Net Loss per Share, Basic and Diluted (Non-GAAP), nine months ended Sep. 30, 2026non-GAAP | $(0.69) | – | – |
| Adjusted EBITDA (Non-GAAP), nine months ended Sep. 30, 2026non-GAAP | $20.01M | – | – |
| Stock-based compensation expense, nine months ended Sep. 30, 2026GAAP | $32.60M | – | – |
| Net cash provided by operating activities, nine months ended Sep. 30, 2026GAAP | $12.81M | – | – |
| DecisionDx-Melanoma test reports, nine months ended Sep. 30, 2026other | 30,478 | – | 5% (test report volume growth as printed) |
| TissueCypher Barrett's Esophagus test reports, nine months ended Sep. 30, 2026other | 42,307 | – | – |
| DecisionDx-SCC test reports, nine months ended Sep. 30, 2026other | 11,595 | – | – |
| MyPath Melanoma test reports, nine months ended Sep. 30, 2026other | 2,832 | – | – |
| DecisionDx-UM test reports, nine months ended Sep. 30, 2026other | 1,396 | – | – |
| AdvanceAD-Tx test reports, nine months ended Sep. 30, 2026other | 2,548 | – | – |
| Esopredict test reports, nine months ended Sep. 30, 2026other | 986 | – | – |
FY2026 outlook
- Revenue$385-395 million total revenue (raised from the previously provided $365-375 million)
- NoteCompany maintains its expectation to achieve positive Adjusted EBITDA for the fourth quarter 2026, the full year 2026 and the full year 2027.
Capital returns
- The release prints no share repurchases and no dividends for the nine months ended September 30, 2026.
- Payment of employees' taxes on vested restricted stock units and performance-based restricted stock units: $(8,314) thousand for the nine months ended September 30, 2026, compared to $(4,289) thousand for the same period in 2025.
- Proceeds from contributions to the employee stock purchase plan: $2,930 thousand for the nine months ended September 30, 2026, compared to $1,702 thousand for the same period in 2025.
- Proceeds from exercise of common stock options: $1,405 thousand for the nine months ended September 30, 2026, compared to $114 thousand for the same period in 2025.
What drove it
- Q3 2026 total test reports for core revenue drivers (DecisionDx-Melanoma and TissueCypher) increased 22% over Q3 2025, as printed in the release.
- The CEO stated that TissueCypher was a key contributor to top-line performance, with 47% year-over-year growth in test report volume in Q3 2026.
- TissueCypher Barrett's Esophagus test reports rose from 10,609 to 15,574 in Q3 2026, and from 27,211 to 42,307 in the nine months.
- The release states that comparison to 2025 includes the change in DecisionDx-SCC Medicare coverage effective April 24, 2025, the re-focus of commercial efforts, and the discontinuation of IDgenetix in May 2025.
- The company says the Q1 2025 Adjusted Net Loss adjustment reflects a one-time acceleration of amortization expense for the IDgenetix test ($20,099 thousand, per the reconciliation footnote).
- Dermatology commercial team delivered 15,168 test reports in Q3 2026 across DecisionDx-Melanoma, AdvanceAD-Tx and DecisionDx-SCC combined, as printed.
- The company raised full-year 2026 total revenue guidance, which it attributes in the release to the anticipated 2026 total revenue range.
Concerns
- GAAP net loss for Q3 2026 was $(4,100) thousand, compared to $(501) thousand in Q3 2025.
- Net losses on equity securities were $(3,425) thousand in Q3 2026, compared to a gain of $3,561 thousand in Q3 2025.
- Net cash provided by operating activities was $19.7 million in Q3 2026, compared to $22.6 million in Q3 2025, and $12,813 thousand for the nine months, compared to $37,416 thousand.
- Adjusted EBITDA for the nine months fell to $20,014 thousand from $32,546 thousand.
- DecisionDx-Melanoma test reports fell to 10,177 from 10,459 in Q3, and DecisionDx-SCC reports fell to 3,882 from 4,186.
- MyPath Melanoma test reports fell to 798 from 1,151 in Q3 2026.
- Gross margin percentage (GAAP) was 74.7% in Q3 2026, the same as the printed prior-year figure, and Adjusted Gross Margin percentage was 76.5%, compared to 76.8%.
- Selling, general and administrative expense rose to $63,792 thousand from $55,907 thousand in Q3.
What to watch
- Delivery of the FY2026 revenue guidance of $385-395 million against the nine-month revenue of $290,116 thousand, as the release has not split guidance by quarter.
- Whether positive Adjusted EBITDA is achieved in Q4 2026, as the company maintains that expectation.
- Trend in DecisionDx-Melanoma, DecisionDx-SCC and MyPath test report volumes, which declined in Q3 2026 year over year.
- Operating cash flow, which was $19.7 million in Q3 2026 and $12,813 thousand for nine months.
- Contribution of AdvanceAD-Tx and Esopredict, which were not offered in the prior-year comparison periods.
- Deliveries under the SciBase collaboration, which the release says began in early Q4 2026 (approximately $0.6 million order).
- Operating expenses at the new Scottsdale, Arizona facility, which the release describes as a 55,000-square-foot facility.
Balance sheet and cash flow
- Cash, cash equivalents and marketable investment securities totaled $277.7 million as of September 30, 2026 (release text).
- Cash and cash equivalents: $77,994 thousand at September 30, 2026, compared to $116,729 thousand at December 31, 2025.
- Marketable investment securities: $199,671 thousand at September 30, 2026, compared to $182,776 thousand at December 31, 2025.
- Total assets: $579,408 thousand at September 30, 2026, compared to $578,556 thousand at December 31, 2025.
- Total liabilities: $100,964 thousand at September 30, 2026, compared to $107,683 thousand at December 31, 2025.
- Total stockholders' equity: $478,444 thousand at September 30, 2026, compared to $470,873 thousand at December 31, 2025.
- Debt: current portion of long-term debt $4,167 thousand and long-term debt $5,917 thousand at September 30, 2026, compared to $417 thousand and $9,640 thousand at December 31, 2025.
- Nine-month net cash used in investing activities: $(46,495) thousand, compared to $(69,198) thousand for the same period in 2025.
- Nine-month purchases of property and equipment: $(28,597) thousand, compared to $(28,837) thousand for the same period in 2025.
- Nine-month net cash used in financing activities: $(5,053) thousand, compared to $(2,371) thousand for the same period in 2025.
- Cash and cash equivalents at end of period (nine months): $77,994 thousand, compared to $85,556 thousand at September 30, 2025.
Analysis
Castle Biosciences reported Q3 2026 GAAP net revenues of $102,891 thousand, up 24% from $83,043 thousand in Q3 2025. Adjusted Revenues, which remove revenue adjustments tied to prior-period test reports, were $101,947 thousand against $80,545 thousand. The company attributes top-line strength in the quarter to TissueCypher, where test report volume grew 47% year over year to 15,574 reports. DecisionDx-Melanoma reports were 10,177 against 10,459, and DecisionDx-SCC and MyPath reports also declined. The release describes core revenue drivers (DecisionDx-Melanoma and TissueCypher) as up 22% in Q3 combined. Nine-month GAAP revenue was $290,116 thousand against $257,219 thousand, and the release notes that the comparison includes the April 2025 DecisionDx-SCC Medicare coverage change, a re-focus of commercial efforts, and the May 2025 discontinuation of IDgenetix.
Margins were stable in the quarter. GAAP gross margin was 74.7% in both Q3 2026 and Q3 2025, and Adjusted Gross Margin was 76.5% against 76.8%. For the nine months, GAAP gross margin rose to 74.2% from 66.8%, while Adjusted Gross Margin fell to 76.8% from 79.9%. Operating expenses rose in Q3: research and development to $15,807 thousand from $12,960 thousand, and SG&A to $63,792 thousand from $55,907 thousand. The operating loss narrowed to $(2,731) thousand from $(6,804) thousand. Below the operating line, net losses on equity securities of $(3,425) thousand, compared with a gain of $3,561 thousand a year earlier, lifted the pre-tax loss to $(3,802) thousand. The GAAP net loss was $(4,100) thousand, or $(0.13) per share, against $(501) thousand, or $(0.02) per share.
Adjusted EBITDA was $12,719 thousand in Q3, compared with $9,160 thousand, and $20,014 thousand for the nine months, compared with $32,546 thousand. Operating cash flow was weaker: $19.7 million in Q3 against $22.6 million, and $12,813 thousand for the nine months against $37,416 thousand. Cash, cash equivalents and marketable investment securities totaled $277.7 million at September 30, 2026. The release prints no share repurchases or dividends. Cash and cash equivalents declined to $77,994 thousand from $116,729 thousand at December 31, 2025, while marketable securities rose to $199,671 thousand from $182,776 thousand.
Guidance was raised. Full-year 2026 total revenue is now expected at $385-395 million, compared with the previously provided $365-375 million, and the company maintains its expectation for positive Adjusted EBITDA in Q4 2026, full-year 2026 and full-year 2027. The release does not provide gross margin, operating expense or tax guidance. The figures to weigh are the top-line growth and the raised guide against the GAAP loss, the lower operating cash flow, and the Q3 decline in several legacy test volumes.
Management, verbatim
Our team delivered another strong quarter, reflecting consistent execution across our portfolio,
Derek Maetzold, President and Chief Executive Officer, Castle Biosciences
TissueCypher was a key contributor to our top-line performance, delivering 47% year-over-year growth in test report volume compared to the third quarter of 2025.
Derek Maetzold, President and Chief Executive Officer, Castle Biosciences
Not in the filing
stated, not guessed- Segment revenue: the release does not report revenue by segment, business or geography, so segments is empty.
- Year-over-year percentage change for Q3 Adjusted Revenues, cost of sales, operating expense lines, operating loss, net loss and EPS (not printed).
- Year-over-year percentage change for nine-month revenue, gross margin, operating expenses and net loss (not printed).
- Quarter-over-quarter comparisons: the release provides no prior-quarter (Q2 2026) figures.
- Balance sheet prior-year comparisons: the balance sheet compares to December 31, 2025, not to a prior-year period, so these are carried in balance_sheet_cash_flow only.
- Quarterly operating cash flow breakdown and quarterly cash flow statement: only nine-month cash flow statement is printed.
- Free cash flow: not printed as a metric.
- Full-year 2026 gross margin, operating expense and tax rate guidance: not provided.
- Prior-period outlook section: not supplied, so vs_prior_guidance is empty.
- Analyst consensus, price targets and share price reaction: not in the documents.
- Nine-month revenue growth percentage: not printed in the release.
- Q3 2026 test report growth percentages for individual tests other than TissueCypher: not printed.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Castle Biosciences (Nasdaq:CSTL) released its Q3 2026 earnings via an SEC Form 8‑K, highlighting revenue growth and an updated full‑year revenue target.
Ticker impact
Castle Biosciences issued guidance raising full-year 2026 revenue outlook to $385‑395 million from $365‑375 million.
likely upside as investors price in higher revenue expectations
The company reported 24% revenue growth YoY and increased test volumes, while also lifting its full‑year revenue guidance, a material new fact that can move the share price.
Market effects
Strengthens outlook for the molecular diagnostics sector as demand for skin‑cancer testing rises.
Positive for U.S. biotech investors focused on precision medicine.
Limited to niche diagnostic market; no broad macro impact.
Counterpoint
Higher guidance may already be priced in; continued net losses could limit upside.
Key entities
- companyCastle Biosciences
Provider of molecular diagnostic tests for dermatology and gastro‑esophageal conditions.
