Fulgent Genetics Reports 4% Revenue Growth in Q2 2026, Operating Loss Increases

Fulgent Genetics, Inc. reported its financial results for the second quarter of 2026, revealing a revenue increase of 4% to $85.4 million compared to $81.8 million in the same period last year. For the first half of 2026, revenue rose slightly by 1% to $156.5 million from $155.3 million in the prior year. The growth in revenue was primarily driven by a $9.4 million increase in anatomic pathology services, which was partially offset by a $6.0 million decline in precision diagnostics, attributed to a significant customer transitioning to in-house testing. The company’s gross profit for the quarter fell to $25.7 million, a decrease of 25% from $34.4 million in the previous year, reflecting a gross margin decline from 42% to 30%.

Operating expenses for the second quarter increased by 14% to $61.8 million, up from $54.1 million in the prior year, largely due to higher costs associated with the recent acquisition of Bako Diagnostics. The company reported an operating loss of $36.1 million for the quarter, compared to a loss of $19.7 million in the same period last year. The net loss attributable to Fulgent was $29.5 million, or $(1.05) per share, compared to a net loss of $19.0 million, or $(0.62) per share, in the prior year.

Fulgent's balance sheet as of June 30, 2026, showed total assets of $1.1 billion, down from $1.2 billion at the end of 2025. The decrease was primarily due to a reduction in cash and cash equivalents, which fell to $26.3 million from $50.2 million. The company’s stockholders’ equity also declined to $996.0 million from $1.1 billion, reflecting the impact of the net loss and stock repurchases. The company repurchased 4.1 million shares at a cost of $63.9 million during the first half of 2026, as part of its ongoing stock repurchase program.

Strategically, Fulgent completed the acquisition of Bako Diagnostics on March 17, 2026, which is expected to enhance its laboratory services business by expanding its product offerings and client base. The integration of Bako's operations is anticipated to contribute positively to future revenue growth. Additionally, the company is focused on advancing its therapeutic development segment, with ongoing clinical trials for its product candidates, including FID-007, which recently showed promising results in a Phase 2 study.

Looking ahead, Fulgent anticipates continued challenges in its precision diagnostics segment due to customer transitions and operational delays related to its billing and revenue cycle management system. However, the company remains optimistic about the potential for revenue growth from its expanded laboratory services and ongoing clinical trials. The management expects to improve profitability through enhanced margins and market expansion, although they acknowledge the inherent risks and uncertainties associated with these initiatives.