MDxHealth (NASDAQ:MDXH) reported flat third-quarter revenue and a wider loss as turnover in its sales organization disrupted commercial execution following the discontinuation of its Resolve urinary tract infection business.
Chief Executive Officer Michael McGarrity said the company is restructuring its commercial organization and expects to exit the fourth quarter with a fully staffed sales team. He said MDxHealth expects revenue in the third and fourth quarters to run roughly in line, though the company is not providing a fourth-quarter forecast.
“Our Q3 results reflected temporary disruption in our commercial execution,” McGarrity said, attributing accelerated sales staff turnover to the Resolve discontinuation and targeting by outside recruiters. He said the company does not believe the disruption reflects a change in underlying clinical demand or its long-term market opportunity.
Revenue Flat as Losses Widen
Revenue from continuing operations was $22.7 million for the quarter ended September 30, 2026, unchanged from a year earlier. Interim Chief Financial Officer Ron Kalfus said Resolve remains classified as a discontinued operation following its wind-down and the closure of the company’s Plano, Texas, laboratory before June 30. The financial figures discussed on the call excluded that business.
Tissue-based tests represented 79% of quarterly revenue, down from 92% a year earlier, as MDxHealth integrated ExoDx liquid testing into its offering. Gross profit fell 5% to $14 million, and gross margin declined to 61.8% from 65%. Kalfus attributed the margin decline primarily to the shift toward liquid-based tests following the ExoDx acquisition.
Operating expenses rose 16% to $22.2 million, contributing to an operating loss of $8.1 million, compared with $4.4 million a year earlier. The net loss from continuing operations widened to $12.3 million from $9.7 million, while adjusted EBITDA was negative $6.3 million, compared with negative $900,000 in the prior-year quarter.
Kalfus said expenses associated with the ExoDx acquisition contributed to the wider losses. Cash and cash equivalents stood at $31.7 million at September 30.
Sales Reset and 2027 Outlook
MDxHealth has eliminated the chief commercial officer role and separated sales and marketing into two operating groups that will report directly to McGarrity. The CEO said the changes are intended to give management closer visibility into territory-level execution and commercial strategy.
McGarrity declined to disclose the number or percentage of sales staff who left, but characterized the turnover as a “profound challenge.” He said the company has made substantial progress recruiting replacements and has not compromised its hiring standards.
New representatives may take one to two quarters to become fully productive, McGarrity said. He does not expect their contribution to become obvious in the fourth quarter and expects a gradual return to growth throughout 2027. The company plans to provide its view of 2027 at the beginning of the year.
Asked whether the third quarter marked the year’s low point, McGarrity said he expected third- and fourth-quarter revenue to be approximately in line, with the recovery beginning in 2027. He cautioned that the mix of tests sold would affect revenue.
McGarrity said the company’s longer-term goal is to return to 20% top-line growth, a rate he said MDxHealth had previously demonstrated for 18 consecutive quarters. He added that the company likely would not guide to that rate for 2027.
Cash and Product Initiatives
Asked about expected cash outlays over the next six to nine months, McGarrity did not provide a cash-burn forecast. He said he did not expect a material unfavorable change in the company’s cost structure and pointed to potential efficiencies over the next several quarters.
McGarrity also said MDxHealth did not have a material anticipated increase in cash outflow for the final stages of the ProtecT study. He said the company expects continued support from its partners as it navigates the disruption, citing its relationship with Exact and Abbott and its debt facility with OrbiMed.
On the product side, McGarrity said MDxHealth continues to use peer-reviewed ProMPT data ahead of the ProtecT trial with the University of Oxford. He said the study has the potential to expand the market for GPS in active surveillance. He also said the company remains on track to roll out strategic artificial intelligence initiatives in the first half of 2027, including a product-related partnership involving digital pathology samples.
Asked about changes to clinical guidelines, McGarrity said MDxHealth had not seen a material effect on GPS performance that he would attribute specifically to those changes. He maintained that the recent setback stemmed from the commercial disruption.
About MDxHealth (NASDAQ:MDXH)
MDxHealth SA (NASDAQ: MDXH) is a molecular diagnostics company focused on helping physicians make more informed decisions in cancer care. The company develops and commercializes genomic and epigenetic tests designed to support cancer detection, diagnosis, prognosis and treatment planning. MDxHealth’s portfolio has primarily centered on prostate cancer. Its ConfirmMDx test analyzes prostate tissue to help identify patients who may have clinically significant cancer despite an initially negative biopsy, while SelectMDx is a urine-based test intended to help assess the likelihood of clinically significant prostate cancer and guide decisions about biopsy.
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