Precipio (NASDAQ:PRPO) reported third-quarter revenue of approximately $7.2 million and set a target to exit 2027 with a combined annualized revenue run rate exceeding $40 million, as the diagnostics company plans to expand its sales team and invest in marketing.
CEO Ilan Danieli said the company aims to reach a product revenue run rate above $10 million and a Pathology Services run rate of approximately $30 million by the end of 2027. He emphasized that the objectives measure annualized revenue as the company exits the year, not total revenue expected to be recognized during 2027.
Danieli called the objectives ambitious and said achieving them would require disciplined execution. The product target compares with an approximately $4 million annualized run rate based on third-quarter 2026 results.
Third-quarter results and cash flow
Total revenue increased from approximately $7 million in the second quarter to $7.2 million in the third quarter. Pathology revenue was approximately $6.3 million, while product revenue exceeded $1 million in a quarter for the first time, Danieli said.
Adjusted earnings before interest, taxes, depreciation and amortization were approximately $400,000, consistent with the second quarter. Operating cash flow was approximately $600,000, compared with approximately $700,000 in the preceding quarter.
Cash increased by approximately $500,000 during the third quarter, bringing the quarter-end balance above $3.5 million, versus approximately $2.2 million a year earlier.
Danieli said Precipio reached a cash-flow-positive position at the end of 2025. The company now plans to use incoming cash flow to accelerate growth while maintaining positive cash flow.
Sales expansion and distributor strategy
Precipio spent 2026 refining its approach to reaching laboratories through distributors, Danieli said. He identified Thermo Fisher, Medline, McKesson and Cardinal Health as distribution partners and said their established customer relationships help Precipio reach laboratory decision-makers.
The CEO said the company currently has four salespeople and plans to double that number next year. Precipio expects to hire at least two more near the beginning of 2027 and continue building the team through the year, partly to handle leads and meetings generated through distributors.
The company also plans to bring in a senior marketing executive and increase its presence at conferences, develop relationships with clinical opinion leaders and support its products with additional publications and case studies. Since quarter-end, Precipio has made commercial leadership changes and is coordinating product and Pathology Services sales efforts more closely, Danieli said.
During the question-and-answer session, Danieli said customer onboarding timelines can range from roughly three to 18 months. He later said the period from an initial conversation to a customer going live averages nine to 12 months, meaning salespeople hired during 2027 could produce results in 2028.
Asked how Precipio would reach its product run-rate target, Danieli said converting half of the current pipeline would get the company there. He cautioned, however, that the timing of a customer’s first order is difficult to predict.
Capacity and margins
Co-founder and Chief Operating Officer Zaki Sabet said Precipio’s existing infrastructure could support approximately $100 million in annual revenue, split roughly equally between Pathology Services and product manufacturing, without significant additional capital investment in core facilities and equipment.
Sabet said the company’s current product pipeline reflects products already available on the market. Precipio is focused on hematology and blood-related cancers for now, he said, before deciding whether to expand into other disease areas.
Danieli said product gross margin is currently in the high 40% to 50% range. He estimated that margins could rise to the mid-60% range if revenue doubles and potentially reach 70% to 75% at a higher scale. He also said the company was not assuming price declines or a drop in demand.
For Pathology Services, Danieli said growth could come from new customers, including customers already using Precipio products. The company may also hire one or two additional representatives for that business, he said.
About Precipio (NASDAQ:PRPO)
Precipio, Inc. (NASDAQ: PRPO) is a biotechnology and medical diagnostics company focused on improving the diagnosis of cancer and other complex diseases. The company combines specialized pathology expertise with laboratory testing and diagnostic technologies intended to help physicians identify disease accurately and support treatment decisions. Precipio provides clinical laboratory services in areas including hematopathology, cytogenetics and molecular diagnostics. Its work is particularly focused on blood cancers and other hematologic disorders, where accurate classification can be challenging.
