Company: CSTL
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0001447362-25-000069
Chunk: 172

Company: CASTLE BIOSCIENCES INC
Filing Date: 2025-05-05
Form: 10-Q
Item: Item 2
Chunk 172
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 revenue from our non-dermatologic tests and a $3.6 million increase in revenue from our dermatologic tests.

The $11.4 million increase in net revenues for our non-dermatologic tests was primarily attributable to our TissueCypher Barrett’s Esophagus test, which was due to higher test report volumes and, to a lesser extent, higher realized average selling price (“ASP”). For the three months ended March 31, 2025 compared to the three months ended March 31, 2024, test report volumes for our TissueCypher Barrett’s Esophagus tests increased by 117%.

The $3.6 million increase in net revenues from our dermatologic tests was largely attributable to an increase in test report volumes for our DecisionDx-SCC test. Increases in our DecisionDx-SCC test report volumes reflect growth through our sales force efforts. Net revenue from our dermatologic tests as a percentage of total net revenue increased from 18.7% for the three months ended March 31, 2024 to 28.4% for the three months ended March 31, 2025.

Cost of Sales (exclusive of amortization of acquired intangible assets)

Cost of sales (exclusive of amortization of acquired intangible assets) for the three months ended March 31, 2025 increased by $2.5 million, or 17.9%, compared to the three months ended March 31, 2024, primarily due to higher personnel costs, higher depreciation expense for lab equipment and leasehold improvements and higher lab services cost. Increases in personnel costs reflect a higher headcount, due to additions made to support business growth in response to growing test report volumes, as well as merit and annual inflationary wage adjustment for existing employees. Higher expense for lab services also reflects higher test report volumes.

Due to the nature of our business, a significant portion of our cost of sales expenses represents fixed costs associated with our testing operations. Accordingly, our cost of sales expense will not necessarily increase or decrease commensurately with the change in net revenues from period to period. We expect our cost of sales expenses (exclusive of amortization of acquired intangible assets) to continue to increase in future periods as we hire additional laboratory personnel and related resources to support expected operational growth and higher test volumes.

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Gross Margin

Our gross margin percentage was 49.2% for the three months ended March 31, 2025, compared to 77.9%