Adaptive Biotechnologies (ADPT) Q2 2025: MRD Revenue Jumps 42% as EMR Integration Accelerates Community Penetration

2025-08-05 | By EarningsIQ Research

Adaptive Biotechnologies’ Q2 marked a major inflection as MRD revenue surged and the segment hit adjusted EBITDA profitability, driven by robust clinical adoption and strategic EMR integrations across academic and community oncology. Expanded Flatiron OncoEMR integration and rising average selling prices signal durable volume and margin tailwinds into 2026. Management’s raised outlook and disciplined cost control point to a clear path toward company-wide cash flow breakeven.

Summary

• MRD Business Achieves Profitability: Segment delivered positive adjusted EBITDA, validating the business model’s scalability.
• EMR Integration Drives Adoption: Flatiron and Epic rollouts are accelerating test volume growth in both academic and community channels.
• Guidance Raised on Momentum: Upgraded MRD revenue and lower cash burn targets reflect sustained operational leverage.

Performance Analysis

Adaptive Biotechnologies’ Q2 results underscore a pivotal shift in the company’s financial and operational trajectory, with total revenue climbing 36% year-over-year and the MRD (Minimal Residual Disease, molecular monitoring for blood cancers) segment now comprising 85% of total revenue. MRD revenue grew 42% year-over-year, propelled by a 37% increase in ClonoSeq test volumes and a 17% rise in average selling price (ASP) to over $1,290 per test. Clinical volumes made up 65% of MRD revenue, while pharma contributed 35%, including $5.5 million in milestone payments.

Sequencing gross margin expanded by 14 percentage points to 64%, reflecting operational scale and higher pricing. Cash burn improved 36% year-over-year, with the company ending the quarter at $222 million in cash. Operating expenses were tightly managed, rising just 1% year-over-year, as higher sales and marketing investments for EMR integration were offset by lower R&D and cost of revenue. The MRD business generated $1.9 million in adjusted EBITDA, a stark turnaround from an $11.3 million loss a year ago, while immune medicine losses also narrowed.

• Volume Acceleration: Over 25,300 ClonoSeq tests delivered, up 10% sequentially, with unique patients tested rising 40% year-over-year.
• Pricing Power: ASP gains driven by payer contracting and improved revenue cycle management, with further upside as new agreements take effect.
• Pharma Backlog Strength: MRD pharma backlog reached $218 million, up 21% year-over-year, reinforcing future revenue visibility.

Operational leverage is now evident across the business, with recurring MRD profitability and improved cash dynamics setting the stage for continued top- and bottom-line expansion in subsequent quarters.

Executive Commentary

Strategic Positioning

1. EMR Integration as Growth Engine

EMR (Electronic Medical Record) integration is now the primary lever for volume expansion, particularly in community oncology. The Q2 rollout of ClonoSeq into Flatiron’s OncoEMR across 113 account groups—many with little prior business—unlocks a large new channel for adoption. Epic integration in academic centers, now live at 40 sites, has proven to double account growth rates versus non-integrated peers. The unique serial monitoring feature in Flatiron is expected to further standardize and increase test ordering frequency.

2. Community Channel and Strategic Partnerships

Community-based testing grew 16% sequentially, demonstrating the effectiveness of targeted sales, education, and workflow simplification. The NeoGenomics partnership is in its pilot phase, targeting clinics where Adaptive previously had no presence, with national rollout expected to materially lift volumes in 2026 and beyond. Blood-based testing now comprises 44% of MRD tests, up 40% year-over-year, removing barriers and expanding addressable patient populations.

3. Pharma Business and Regulatory Momentum

The MRD pharma segment delivered 20% revenue growth and a 21% increase in backlog, with 175 active trials and ClonoSeq used as an endpoint in 90 studies. Recent regulatory tailwinds—such as the European Medicines Agency’s support for MRD as an early endpoint—are incentivizing pharma partners to embed MRD in clinical trial protocols globally, supporting further backlog growth and milestone revenue visibility.

4. Margin Expansion and Cost Discipline

Sequencing margin gains are structural, as operational scale, Novaseq X processing, and ASP improvements compound. Operating expenses remain tightly controlled, with MRD accounting for the majority of spend. The business is now positioned for recurring MRD EBITDA profitability and a credible path to total company cash breakeven.

5. Innovation Pipeline and Future Monetization

Adaptive continues to invest in its digital TCR (T-cell receptor, immune profiling) antigen prediction platform and a preclinical T cell depletion program for autoimmunity. While still early, these initiatives aim to reduce discovery costs and create new partnering opportunities, with the goal of scaling immune medicine revenue and diversifying the business model over time.

Key Considerations

The quarter’s results validate Adaptive’s focused execution and strategic bets on MRD, but the evolving landscape requires attention to several forward levers and risks:

Key Considerations:

• EMR Integration Uptake: Sustained adoption and optimization of Flatiron and Epic integrations are critical for maintaining elevated volume growth rates.
• Community Penetration: Execution on NeoGenomics and large oncology network partnerships will determine the scale of future market share gains.
• ASP Durability: Continued payer contracting and mix shift to higher-priced tests underpin margin expansion, but require ongoing negotiation success.
• Pharma Backlog Conversion: Timely trial enrollment and regulatory clarity are needed to translate backlog into realized revenue and milestones.
• Pipeline Execution: Progress in digital TCR prediction and autoimmunity programs will inform long-term diversification and monetization potential.

Risks

Quarterly milestone revenue remains lumpy, and pharma backlog conversion is subject to clinical trial timing and regulatory outcomes. Community channel expansion relies on successful integration and provider adoption, which could slow if workflow or reimbursement hurdles arise. Competitive pressure from broader diagnostic menus offered by peers could challenge Adaptive’s share if not met with continued innovation and commercial execution.

Forward Outlook

For Q3 and Q4 2025, Adaptive guided to:

• Sequential growth in ClonoSeq test volumes
• MRD milestone revenue between $14 million and $15 million for the year

For full-year 2025, management raised guidance:

• MRD revenue of $190 million to $200 million (from $180 million to $190 million)
• Cash burn lowered to $45 million to $55 million (from $50 million to $60 million)

Management emphasized that recurring MRD segment profitability is sustainable, and that community integration and payer contracting will drive continued top-line and margin gains. Key factors include:

• Flatiron and NeoGenomics integration ramp
• Further ASP improvement as new contracts take effect

Takeaways

Adaptive Biotechnologies has crossed a critical profitability threshold in its core MRD business, with structural tailwinds from EMR integration, payer contracting, and regulatory momentum.

• Volume and Margin Tailwinds: Sustained double-digit test growth and ASP expansion are driving durable margin improvement and recurring segment profitability.
• Channel Strategy Unlocks New Markets: Flatiron and NeoGenomics partnerships position Adaptive to penetrate previously untapped community oncology segments.
• Execution in the Back Half: Investors should monitor EMR integration pace, community channel adoption, and pharma backlog conversion as key determinants of upside in 2025 and beyond.

Conclusion

Adaptive’s MRD business has reached a self-sustaining inflection, with operational leverage and strategic partnerships driving both growth and profitability. The company’s disciplined execution and expanded guidance signal confidence in its ability to scale further, though continued attention to channel adoption and backlog realization will be critical for sustaining momentum.

Industry Read-Through

Adaptive’s rapid MRD volume growth and margin expansion highlight the competitive advantage of deep EMR integration and payer contracting in molecular diagnostics. The success of Flatiron and Epic rollouts signals that workflow integration is now a gating factor for broad-based adoption across oncology. The pharma segment’s regulatory tailwinds and growing backlog point to an industry-wide shift toward MRD as a clinical trial endpoint, which could accelerate adoption and reimbursement for similar assays. Competitors offering broader diagnostic menus will need to match both integration and channel execution to defend share as the MRD market matures.

ADPT Healthcare Diagnostics Molecular Testing MRD EMR Integration Community Oncology Payer Contracting