Castle Biosciences Inc. (NASDAQ: CSTL) reported fiscal year 2025 revenue of $344.2 million, up 4% from $332.1 million in 2024, and fourth‑quarter revenue of $87.0 million, a 7% increase from the prior year’s $81.4 million. The company posted an adjusted net loss per share of $0.08 for the quarter, a significant beat of the consensus estimate of $0.29 and a reversal of the $0.32 loss reported in Q4 2024. The adjusted loss for the full year was $0.14 per share, compared with a $0.62 loss in 2024, underscoring improved cost control and stronger product mix.
The growth in revenue was driven largely by the dermatology franchise, where TissueCypher test reports rose 86% year‑over‑year to 1.2 million, and by the launch of AdvanceAD‑Tx, a limited‑access test for moderate‑to‑severe atopic dermatitis that began commercial distribution in November 2025. The company’s gastroenterology segment also contributed to revenue growth, while the loss of DecisionDx‑SCC revenue due to a Medicare coverage change effective April 24 2025 and the discontinuation of the IDgenetix test in May 2025 weighed on the overall mix.
Gross margin contracted to 69% in 2025 from 79% in 2024, largely because the loss of DecisionDx‑SCC revenue removed a high‑margin product from the mix and a one‑time $20.1 million amortization acceleration in Q1 2025 increased operating expenses. Adjusted gross margin, which excludes the amortization charge, fell modestly from 82% to 80%, indicating that the core business remains profitable but is experiencing pressure from the mix shift and the Medicare coverage change.
Management reiterated its 2026 revenue guidance of $340 million to $350 million, a 4% to 5% increase over the 2025 level. The guidance reflects confidence in continued adoption of core tests and the expansion into the atopic dermatitis market, while acknowledging the headwind from Medicare coverage changes. The company’s cash, cash equivalents and marketable securities totaled $299.5 million as of December 31 2025, and it reported zero debt, positioning it to invest in commercial expansion and potential acquisitions without financing constraints.
The results demonstrate that Castle Biosciences is executing on its growth strategy, with strong demand for its core dermatology tests and a promising new product launch. The company’s ability to narrow its adjusted loss and maintain a solid cash position amid margin compression signals disciplined cost management and a resilient business model.
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