Shares of Precipio, Inc. (PRPO Quick QuotePRPO - Free Report) have gained 19.8% since the company reported earnings for the quarter ended Sept. 30, 2025, sharply outperforming the S&P 500 Index’s 2.2% loss over the same period. The stock has also risen 28.2% over the past month, while the broader market slipped 2% during the same time.

PRPO’s Earnings Snapshot

Precipio posted strong third-quarter 2025 results, with revenue rising 29.9% year over year to $6.8 million from $5.2 million in the year-ago quarter. The company also notched a 19.7% sequential revenue increase from $5.7 million in second-quarter 2025. Adjusted EBITDA rose to $0.5 million from $0.1 million a year ago and from a loss of $0.1 million in the prior quarter. Gross margin inched up to 44% from 43% in second-quarter 2025, while GAAP net loss narrowed to $0.1 million from $0.6 million in third-quarter 2024. Loss per share improved significantly to $0.05 from $0.42 in the year-ago quarter.

The Pathology Services division increased revenue 20% sequentially to $6 million from $5 million, supported by new customer additions and stable cost of goods sold. The Products division posted 16% sequential revenue growth to $0.7 million from $0.6 million, aided by increased ordering from existing clients and uptake of new test panels.

Precipio’s Operational Momentum and Key Business Metrics

PRPO’s profitability metrics continued to improve. In third-quarter 2025, EBITDA reached $0.3 million against a loss of $0.3 million in the year-ago quarter, while adjusted EBITDA — after accounting for stock-based compensation and other non-operating items — reached $0.5 million, up from $0.1 million a year earlier. Precipio also posted a notable shift in operating cash flow, generating $285,000 during the quarter against a cash burn of $148,000 in the second quarter of 2025. This milestone supports management’s assertion that the company has reached financial independence and can now fund growth internally.

Gross margin trends were mixed across segments. Pathology Services improved from 43% to 46% quarter over quarter, benefiting from higher case volume with no meaningful increase in fixed costs. In contrast, Product Division margins fell from 44% in second-quarter 2025 to 30% in the third quarter, driven primarily by strategic investments rather than cost inflation or production inefficiencies. These investments included expanded laboratory space and an additional technical support specialist to accelerate customer onboarding. Management noted that revenue scaling should offset these temporary margin pressures.

PRPO’s Management Commentary

Management characterized the quarter as a turning point, noting that Precipio has shifted from a survival-oriented mindset to one focused on strategic expansion. Leadership emphasized that the combination of operational discipline, sustained revenue gains and improved margins has enabled the company to operate without dependence on external capital. This financial stability, they noted, is creating opportunities to reinvest in growth initiatives and strengthen the company’s competitive position.

Executives highlighted the continued momentum within the Pathology Services division, pointing to strong customer conversions and feedback indicating that clients value Precipio’s level of personalized service relative to national laboratory chains. Management underscored that the company’s internal culture — centered on accountability, collaboration and customer focus — has allowed Precipio to scale operations without sacrificing service quality or efficiency.

In the Products division, leadership pointed to deeper engagement among long-standing customers and increasing activity through distributor channels. Several additional customers are expected to come online in the upcoming quarters, supported by enhanced distributor relationships and expanded technical support capabilities. Overall, management conveyed confidence that both divisions are positioned for sustained growth due to PRPO’s strengthened operational foundations and improved financial flexibility.

Factors Influencing Precipio’s Headline Numbers

Revenue growth was broad-based. Pathology Services benefited from new account activations within a robust pipeline of prospective customers, several of whom remain in trial phases. The Products division’s gains were driven by higher utilization from long-time customers and the adoption of new testing panels.

Gross margin dynamics reflected both divisions’ scaling trajectories. Pathology Services leveraged past investments in capacity to support higher volumes at stable cost levels. The Products division’s margin compression was attributable to higher fixed costs from lab expansion and the hiring of a technical specialist — moves explicitly intended to support the next phase of growth. These costs alone shaved margins, but management expects the investments to unlock significant future revenue leverage.

PRPO’s Guidance and Outlook

Management outlined four priorities for the remainder of 2025 and into 2026 — sustaining double-digit growth across both divisions, further margin expansion, reinvestment of internally generated cash and broader investor outreach to support liquidity and share price appreciation. Precipio also expects overall company gross margins to exceed 50% by mid-2026 as revenue scales against a largely fixed-cost structure.

Additionally, PRPO is two months away from completing its quarterly repayments to Change Healthcare, after which all operating cash flow will stay within the business.

Precipio’s Other Developments

Precipio expanded its physical footprint during third-quarter 2025 by leasing additional laboratory space — an investment aimed at separating clinical services from product manufacturing and increasing operational efficiency. This expansion added roughly $120,000 in annual rent and marked the first quarter in which the associated costs were reflected in financial results. No acquisitions or divestitures were noted in the quarter.