# EDGAR Filing Document

**Accession Number:** 0001447362
**File Stem:** 0001447362-23-000036
**Filing Date:** 2023-2
**Character Count:** 56885
**Document Hash:** 9794d51140fda85a201dae209dcc4fdc
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001447362-23-000036.hdr.sgml**: 20230228

**ACCESSION NUMBER**: 0001447362-23-000036

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 35

**CONFORMED PERIOD OF REPORT**: 20230228

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230228

**DATE AS OF CHANGE**: 20230228

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CASTLE BIOSCIENCES INC
- **CENTRAL INDEX KEY:** 0001447362
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-MEDICAL LABORATORIES [8071]
- **IRS NUMBER:** 770701774
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38984
- **FILM NUMBER:** 23685304

**BUSINESS ADDRESS:**
- **STREET 1:** 505 S FRIENDSWOOD DRIVE
- **STREET 2:** SUITE 401
- **CITY:** FRIENDSWOOD
- **STATE:** TX
- **ZIP:** 77546
- **BUSINESS PHONE:** 866-788-9007

**MAIL ADDRESS:**
- **STREET 1:** 505 S FRIENDSWOOD DRIVE
- **STREET 2:** SUITE 401
- **CITY:** FRIENDSWOOD
- **STATE:** TX
- **ZIP:** 77546

?xml version="1.0" ? cstl-20230228

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d)**

**of the Securities Exchange Act of 1934**

**Date of Report (Date of earliest event reported): February 28, 2023**

**Castle Biosciences, Inc.**

**(Exact name of registrant as specified in its charter)**

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| | | |
|:---|:---|:---|
| **Delaware** | **001-38984** | **77-0701774** |
| **(state or other jurisdiction<br>of incorporation)** | **(Commission<br>File Number)** | **(I.R.S. Employer<br>Identification No.)** |

---

---

| | |
|:---|:---|
| **505 S. Friendswood Drive, Suite 401**<br>**Friendswood, Texas** | **77546** |
| **(Address of principal executive offices)** | **(Zip Code)** |

---

**Registrant's telephone number, including area code: (866) 788-9007**

**(Former name or former address, if changed since last report.)**

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐&nbsp;&nbsp;&nbsp;&nbsp;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐&nbsp;&nbsp;&nbsp;&nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐&nbsp;&nbsp;&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐&nbsp;&nbsp;&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| **Common Stock, $0.001 par value per share** | **CSTL** | **The Nasdaq Global Market** |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b–2 of the Securities Exchange Act of 1934 (§ 240.12b–2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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**Item 2.02&nbsp;&nbsp;&nbsp;&nbsp;Results of Operations and Financial Condition.**

On February 28, 2023, Castle Biosciences, Inc. (the "Company") issued a press release announcing its financial results for the fourth quarter and year ended December 31, 2022. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

The information contained or incorporated in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended (the "Securities Act"), except as expressly set forth by specific reference in such filing to this Current Report on Form 8-K.

**Item 7.01&nbsp;&nbsp;&nbsp;&nbsp;Regulation FD Disclosure.**

On February 28, 2023, the Company made available the slide presentation attached hereto as Exhibit 99.2. Information from this slide presentation may also be used by the management of the Company in future meetings regarding the Company.

The information contained or incorporated in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2, shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act except as expressly set forth by specific reference in such filing to this Current Report on Form 8-K.

**Item 9.01&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements and Exhibits.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Exhibits.

---

| | |
|:---|:---|
| **Exhibit**<br>**Number** |<br>**Description** |
| 99.1 | <u>[Press release issued February 28, 2023.](exhibit991q42022earningsre.htm)</u> |
| 99.2 | <u>[Slide presentation.](exhibit992q422.htm)</u> |
| 104 | Inline XBRL for the cover page of this Current Report on Form 8-K. |

---

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---

| |
|:---|
| **SIGNATURES** |
| Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized. |

---

---

| | | |
|:---|:---|:---|
| | **CASTLE BIOSCIENCES, INC.** | **CASTLE BIOSCIENCES, INC.** |
| | By: | /s/ Frank Stokes |
| | | Frank Stokes |
| | | Chief Financial Officer |
| Date: February 28, 2023 |  |  |

---

## Exhibit 99.1

![cstllogo01a.jpg](cstllogo01a.jpg)

**Exhibit 99.1**

**<u>Castle Biosciences Reports Fourth Quarter and Full-Year 2022 Results</u>**

*Full-year 2022 revenue was up 46% over 2021 to $137 million, meeting top end of guided range* 

*Delivered 44,419 total test reports in 2022, an increase of 58% compared to 2021*

*Full-year 2023 revenue is expected to be between $170-180 million*

*Conference call and webcast today at 4:30 p.m. ET*

**FRIENDSWOOD, Texas- Feb. 28, 2023--**Castle Biosciences, Inc. (Nasdaq: CSTL), a company improving health through innovative tests that guide patient care, today announced its financial results for the fourth quarter and twelve months ended Dec. 31, 2022.

"In 2022, we delivered strong year-over-year growth in revenue and test report volume, reflecting solid execution by our Castle team," said Derek Maetzold, president and chief executive officer of Castle Biosciences. "Further, we believe our success continues to lay the foundation for future growth in 2023 and beyond. We are pleased to provide our financial outlook for 2023, expecting between $170-180 million in total revenue.

"We expect continued progress on our growth initiatives in 2023, including expanded evidence development supporting our proprietary commercial and pipeline tests and the continued integrations of our acquired franchises--gastroenterology and mental health--which we expect to contribute to achieving our 2025 financial targets of total revenue between $255-330 million and net operating cash flow positivity."

**Twelve Months Ended Dec. 31, 2022, Financial and Operational Highlights**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Revenues were $137.0 million, a 46% increase compared to $94.1 million during 2021. Included in revenues for the year were revenue adjustments related to tests delivered in prior periods. These prior period revenue adjustments for the twelve months ended Dec. 31, 2022, were $2.0 million of net negative revenue adjustments, compared to $3.3 million of net positive revenue adjustments for 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adjusted revenues, which exclude the effects of revenue adjustments related to tests delivered in prior periods, were $139.0 million, a 53% increase, compared to $90.8 million for 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Total test reports delivered in 2022 were 44,419, a 58% increase compared to 28,145 in 2021:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ DecisionDx®-Melanoma test reports delivered in 2022 were 27,803, compared to 20,328 in 2021, an increase of 37%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ DecisionDx®-SCC test reports delivered in 2022 were 5,967, compared to 3,510 in 2021, an increase of 70%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ MyPath® Melanoma and DiffDx®-Melanoma diagnostic gene expression profile (GEP) aggregate test reports delivered in 2022 were 3,561, compared to 2,662 in 2021, an increase of 34%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ DecisionDx®-UM test reports delivered in 2022 were 1,711, compared to 1,618 in 2021, an increase of 6%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ TissueCypher® Barrett's Esophagus test reports delivered in 2022 were 2,128, compared to 27 in 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ IDgenetix® test reports delivered in 2022 were 3,249. No test reports were delivered by Castle in 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Gross margin for 2022 was 71%, and adjusted gross margin for 2022 was 77%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Operating cash flow was $(41.7) million, compared to $(19.0) million for 2021, and adjusted operating cash flow was $(41.7) million, compared to $(12.5) million in 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Net loss for 2022, which includes non-cash stock-based compensation expense of $36.3 million, was $(67.1) million, compared to $(31.3) million for 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adjusted EBITDA for 2022 was $(42.6) million, compared to $(14.9) million in 2021.

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**Cash, Cash Equivalents and Marketable Investment Securities**

As of Dec. 31, 2022, the Company's cash, cash equivalents and marketable investment securities totaled $258.6 million.

**Fourth Quarter Ended Dec. 31, 2022, Financial and Operational Highlights**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Revenues were $38.3 million, a 53% increase compared to $25.0 million during the same period in 2021. Included in revenue for the period were revenue adjustments related to tests delivered in prior periods. These prior period revenue adjustments for the quarter ended Dec. 31, 2022, were $0.8 million of net positive revenue adjustments, compared to $0.8 million of net negative revenue adjustments for the same period in 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adjusted revenues, which exclude the effects of revenue adjustments related to tests delivered in prior periods, were $37.5 million, a 45% increase compared to $25.8 million for the same period in 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Delivered 12,644 total test reports in the fourth quarter of 2022, an increase of 53% compared to 8,269 in the same period of 2021:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ DecisionDx-Melanoma test reports delivered in the quarter were 7,301, compared to 5,635 in the fourth quarter of 2021, an increase of 30%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ DecisionDx-SCC test reports delivered in the quarter were 1,845, compared to 1,265 in the fourth quarter of 2021, an increase of 46%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ MyPath Melanoma and DiffDx-Melanoma diagnostic GEP aggregate test reports delivered in the quarter were 822, compared to 904 in the fourth quarter of 2021, a decrease of 9%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ DecisionDx-UM test reports delivered in the quarter were 432, compared to 438 in the fourth quarter of 2021, a decrease of 1%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ TissueCypher Barrett's Esophagus test reports delivered in the quarter were 1,030, compared to 27 in the fourth quarter of 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ IDgenetix test reports delivered in the quarter were 1,214. No test reports were delivered by Castle in the fourth quarter of 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Gross margin for the quarter ended Dec. 31, 2022, was 69%, and adjusted gross margin was 75%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Operating cash flow was $(6.0) million, compared to $(2.8) million for the same period in 2021, and adjusted operating cash flow was $(6.0) million, compared to $0.2 million for the same period in 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Net loss for the fourth quarter was $(20.6) million, compared to $(6.4) million for the same period in 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adjusted EBITDA for the fourth quarter was $(10.4) million, compared to $(6.9) million for the same period in 2021.

**2023 Outlook**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company anticipates generating between $170-180 million in total revenue in 2023.

**Fourth Quarter and Recent Accomplishments and Highlights**

***Dermatology***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In November, the Company announced new data showing how its DecisionDx-SCC test can provide objective, independent and significant risk-stratification for cutaneous squamous cell carcinoma (SCC) tumors with uncertainty in differentiation status. The data were shared in an oral presentation given at the American Society of Dermatopathology (ASDP) 59th Annual Meeting by Sarah Estrada, M.D., dermatopathologist with Affiliated Dermatology in Scottsdale, Arizona. These data demonstrate how DecisionDx-SCC can significantly stratify the risk of metastasis in high-risk SCC patients with an ambiguous tumor differentiation status. Additionally, the study shows that incorporating the test's results into clinical SCC risk assessments improves risk-stratification, which enhances current patient management decisions to improve patient outcomes. See the Company's <u>news release</u> from November 15, 2022, for more information.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In October, the Company announced the publication of real-world clinical utility data in *Cancer Investigation* showing that clinicians are ordering DecisionDx-SCC for the intended high-risk SCC patient population and that use of the test's results can lead to risk-aligned changes in patient management strategies. The paper, titled "Real-World Evidence Shows Clinicians Appropriately Use the Prognostic 40-GEP Test for High-Risk Cutaneous Squamous Cell Carcinoma (cSCC) Patients," evaluated metrics from one year of clinical DecisionDx-SCC orders and the test's impact on real-world risk assessments and treatment decisions. Overall, the study data support the clinical impact that DecisionDx-SCC's personalized, risk-stratification results can have on patient management plans, including helping avoid the overtreatment of patients and guiding risk-appropriate disease management decisions, alongside traditional risk factor assessments. See the Company's <u>news release</u> from October 31, 2022, for more information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In October, the Company announced new data from two studies demonstrating the potential of DecisionDx-Melanoma and DecisionDx-UM to accurately stratify risk of death from melanoma (cutaneous melanoma (CM) and uveal melanoma (UM), respectively) in a group of real-world, unselected and prospectively tested patients. The studies are part of the Company's ongoing collaboration with the National Cancer Institute (NCI) to link DecisionDx-Melanoma and DecisionDx-UM clinical testing data with data from the Surveillance, Epidemiology and End Results (SEER) Program's registries on CM and UM cases, respectively. The data were shared in poster presentations at the 19th International Congress of the Society for Melanoma Research (SMR) in Edinburgh, United Kingdom. See the Company's <u>news release</u> from October 27, 2022, for more information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In October, the Company announced new data from UTILISE (Clinical Utility and Health Outcomes Study), a prospective, multi-center, clinical utility study of DecisionDx-SCC, designed to capture the real-world impact of DecisionDx-SCC test results on the management of patients with SCC and one or more risk factors. This first analysis showed that DecisionDx-SCC test results positively impacted patient management in over 80% of the patients enrolled in the study, consistent with previous clinical utility studies demonstrating that the test's results can impact risk-appropriate changes in patient management plans, within established guidelines. This data from the UTILISE study was presented during the 2022 Fall Clinical Dermatology Conference through a poster titled, "A prospective clinical utility study demonstrates that physicians use the 40-gene expression profile (40-GEP) to guide clinical management decisions for Medicare-eligible patients with cutaneous squamous cell carcinoma (cSCC)." See the Company's <u>news release</u> from October 24, 2022, for more information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In October, the Company announced new data from its prospective, multicenter DECIDE study in which DecisionDx-Melanoma test results influenced 85% of clinicians' decisions regarding the sentinel lymph node biopsy (SLNB) surgical procedure, demonstrating the role of the test's results in guiding risk-aligned patient management decisions. When DecisionDx-Melanoma test results influenced for SLNB, the procedure was performed in 92% of the cases in the study; similarly, when the test result influenced against SLNB, the decision was made to forego SLNB in 70% of cases. This data indicates that the test's results in conjunction with current guidelines can guide risk-aligned clinical decision-making regarding the SLNB surgical procedure. See the Company's <u>news release</u> from October 20, 2022, for more information.

***Gastroenterology***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In November, the Company announced that the Accreditation Committee of the College of American Pathologists (CAP) had accredited its clinical laboratory facility in Pittsburgh. This achievement followed an on-site inspection as part of the CAP's Laboratory Accreditation Program. Recognized by the U.S. federal government as being equal to or more stringent than its own inspection program, CAP accreditation is awarded to facilities that meet the highest standards of quality in laboratory services. Once achieved, on-site inspections occur every two years to assess ongoing compliance with the CAP accreditation program requirements. Castle acquired its laboratory in Pittsburgh through the acquisition of Cernostics, Inc. in December 2021, and subsequently initiated ongoing process improvements and laboratory expansion efforts. With this accreditation, all of Castle's laboratories are now CAP

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accredited, reflecting the Company's commitment to high-quality standards and excellence in patient care. See the Company's <u>news release</u> from November 21, 2022, for more information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In October, the Company announced new data showing that the use of TissueCypher Barrett's Esophagus test results can significantly improve management decisions for Barrett's esophagus (BE) patients with low-grade dysplasia (LGD) to improve health outcomes. Overall, the study results show that TissueCypher may be used to standardize the management of BE patients with LGD to improve health outcomes, by helping ensure that patients at a high risk of progression receive earlier interventions and by potentially reducing unnecessary use of endoscopic eradication therapy (EET) and endoscopies for lower risk patients. See the Company's <u>news release</u> from October 25, 2022, for more information.

***Uveal Melanoma***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In November, the Company announced the publication of a study completed in collaboration with the Melanoma Research Foundation (MRF) in which most patients diagnosed with uveal melanoma (UM) indicated their desire for prognostic testing at diagnosis, reported finding value in their test result and experienced lower decision regret, regardless of whether their test result indicated that their UM tumor was at a high or low risk of metastasis. The study, titled "Uveal melanoma patient attitudes towards prognostic testing using gene expression profiling," was published in Melanoma Management. See the Company's <u>news release</u> from November 17, 2022, for more information.

***Corporate***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In November, the Company was named a Houston Chronicle Top Workplace for the second year in a row. More than 70,000 employees from 4,966 companies in the Houston metro area participated in the nomination process, but only 200 companies were named as 2022 Top Workplaces, including Castle. The Top Workplaces program starts with capturing employee feedback on what matters most about a company's culture through an anonymous survey. The survey measures fifteen drivers of company culture that are critical to an organization's success, as well as other insights related to a company's leadership and employee engagement. See the Company's <u>news release</u> from November 14, 2022, for more information.

**Conference Call and Webcast Details**

Castle Biosciences will hold a conference call on Tuesday, Feb. 28, 2023, at 4:30 p.m. Eastern time to discuss its fourth quarter and full-year 2022 results and provide a corporate update.

A live webcast of the conference call can be accessed here: or via the webcast link on the Investor Relations page of the Company's <u>website</u>, <u>https://ir.castlebiosciences.com/overview/default.aspx</u>. Please access the webcast at least 10 minutes before the conference call start time. An archive of the webcast will be available on the Company's website until March 21, 2023.

To access the live conference call via phone, please dial 844 200 6205 from the United States, or +1 929 526 1599 internationally, at least 10 minutes prior to the start of the call, using the conference ID 223262.

There will be a brief Question & Answer session following management commentary.

**Use of Non-GAAP Financial Measures (UNAUDITED)**

In this release, we use the metrics of Adjusted Revenues, Adjusted Gross Margin, Adjusted Operating Cash Flow and Adjusted EBITDA, which are non-GAAP financial measures and are not calculated in accordance with generally accepted accounting principles in the United States (GAAP). Adjusted Revenues and Adjusted Gross Margin reflect adjustments to net revenues to exclude changes in variable consideration related to test reports delivered in previous periods but not recorded as revenues until a subsequent period. Adjusted Gross Margin further excludes acquisition-related intangible asset amortization. Adjusted Operating Cash Flow excludes the effects of repayments to Medicare of COVID-19 government relief advancements to healthcare providers. Adjusted EBITDA excludes from net loss interest income, interest expense, income tax expense

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(benefit), depreciation and amortization expense, stock-based compensation expense, change in fair value of contingent consideration, and acquisition-related transaction costs.

We use Adjusted Revenues, Adjusted Gross Margin, Adjusted Operating Cash Flow and Adjusted EBITDA internally because we believe these metrics provide useful supplemental information in assessing our revenue and cash flow performance reported in accordance with GAAP, respectively. We believe that Adjusted Revenues, when used in conjunction with our test report volume information, facilitates investors' analysis of our current-period revenue performance and average selling price performance by excluding the effects of revenue adjustments related to test reports delivered in prior periods, since these adjustments may not be indicative of the current or future performance of our business. We believe that providing Adjusted Revenues may also help facilitate comparisons to our historical periods. Adjusted Gross Margin is calculated using Adjusted Revenues and therefore excludes the impact of revenue adjustments related to test reports delivered in prior periods, which we believe is useful to investors as described above. We further exclude acquisition-related intangible asset amortization in the calculation of Adjusted Gross Margin. We believe that excluding acquisition-related intangible asset amortization may facilitate gross margin comparisons to historical periods and may be useful in assessing current-period performance without regard to the historical accounting valuations of intangible assets, which are applicable only to tests we acquired rather than internally developed. We believe Adjusted Operating Cash Flow is also useful to investors as a supplement to GAAP measures in the assessment of our cash flow performance by removing the effects of COVID-19 government relief payment activity, which we believe are not indicative of our ongoing operations. We believe Adjusted EBITDA may enhance an evaluation of our operating performance because it excludes the impact of prior decisions made about capital investment, financing, investing and certain expenses we believe are not indicative of our ongoing performance, such as acquisition-related transaction costs. However, these non-GAAP financial measures may be different from non-GAAP financial measures used by other companies, even when the same or similarly titled terms are used to identify such measures, limiting their usefulness for comparative purposes.

These non-GAAP financial measures are not meant to be considered in isolation or used as substitutes for net revenues, gross margin, net cash (used in) provided by operating activities or net loss reported in accordance with GAAP; should be considered in conjunction with our financial information presented in accordance with GAAP; have no standardized meaning prescribed by GAAP; are unaudited; and are not prepared under any comprehensive set of accounting rules or principles. In addition, from time to time in the future, there may be other items that we may exclude for purposes of these non-GAAP financial measures, and we may in the future cease to exclude items that we have historically excluded for purposes of these non-GAAP financial measures. Likewise, we may determine to modify the nature of adjustments to arrive at these non-GAAP financial measures. Because of the non-standardized definitions of non-GAAP financial measures, the non-GAAP financial measure as used by us in this press release and the accompanying reconciliation tables have limits in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. Accordingly, investors should not place undue reliance on non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables at the end of this release.

**About Castle Biosciences**

Castle Biosciences (Nasdaq: CSTL) is a leading diagnostics company improving health through innovative tests that guide patient care. The Company aims to transform disease management by keeping people first: patients, clinicians, employees and investors.

Castle's current portfolio consists of tests for skin cancers, uveal melanoma, Barrett's esophagus and mental health conditions. Additionally, the Company has active research and development programs for tests in other diseases with high clinical need, including its test in development to predict systemic therapy response in patients with moderate-to-severe psoriasis, atopic dermatitis and related conditions. To learn more, please visit <u>www.CastleBiosciences.com</u> and connect with us on <u>LinkedIn</u>, <u>Facebook</u>, <u>Twitter</u> and <u>Instagram</u>.

DecisionDx-Melanoma, DecisionDx-CMSeq, DecisionDx-SCC, MyPath Melanoma, DiffDx-Melanoma, DecisionDx-UM, DecisionDx-PRAME, DecisionDx-UMSeq, TissueCypher and IDgenetix are trademarks of Castle Biosciences, Inc.

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**Forward-Looking Statements**

**Investor Relations Contact:**

Camilla Zuckero

<u>czuckero@castlebiosciences.com</u>

281-906-3868

**Media Contact:** 

Allison Marshall

<u>amarshall@castlebiosciences.com</u>

###

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**CASTLE BIOSCIENCES, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**

**(in thousands, except per share data)**

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Twelve Months Ended<br>December 31,** | **Twelve Months Ended<br>December 31,** |
| | **2022** | **2021** | **2022** | **2021** |
| | (unaudited) | (unaudited) | | |
| **NET REVENUES** | $38338 | $25039 | $137039 | $94085 |
| **OPERATING EXPENSES AND OTHER OPERATING INCOME** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost of sales (exclusive of amortization of acquired intangible assets) | 9520 | 4597 | 32009 | 15822 |
| &nbsp;&nbsp;&nbsp;Research and development | 11309 | 9445 | 44903 | 29646 |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative | 38426 | 25160 | 143003 | 86738 |
| &nbsp;&nbsp;&nbsp;Amortization of acquired intangible assets | 2215 | 1008 | 8266 | 1958 |
| &nbsp;&nbsp;&nbsp;Change in fair value of contingent consideration | (300) |  | (18287) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses, net | 61170 | 40210 | 209894 | 134164 |
| **Operating loss** | (22832) | (15171) | (72855) | (40079) |
| Interest income | 2275 | 17 | 3968 | 68 |
| Interest expense | (4) | (1) | (17) | (1) |
| **Loss before income taxes** | (20561) | (15155) | (68904) | (40012) |
| Income tax expense (benefit) | 57 | (8725) | (1766) | (8720) |
| **Net loss** | $(20618) | $(6430) | $(67138) | $(31292) |
| Loss per share, basic and diluted | $(0.78) | $(0.25) | $(2.58) | $(1.24) |
| Weighted-average shares outstanding, basic and diluted | 26400 | 25329 | 26054 | 25137 |

---

***Stock-Based Compensation Expense***

Stock-based compensation expense is included in the condensed consolidated statements of operations as follows (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Twelve Months Ended<br>December 31,** | **Twelve Months Ended<br>December 31,** |
| | **2022** | **2021** | **2022** | **2021** |
| | (unaudited) | (unaudited) | | |
| Cost of sales (exclusive of amortization of acquired intangible assets) | $1030 | $578 | $3755 | $2058 |
| Research and development | 2028 | 1256 | 7635 | 4522 |
| Selling, general and administrative | 6865 | 5017 | 24931 | 15160 |
| Total stock-based compensation expense | $9923 | $6851 | $36321 | $21740 |

---

------

**CASTLE BIOSCIENCES, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS**

**(in thousands)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Twelve Months Ended<br>December 31,** | **Twelve Months Ended<br>December 31,** |
| | **2022** | **2021** | **2022** | **2021** |
| | (unaudited) | (unaudited) | | |
| **Net loss** | $(20618) | $(6430) | $(67138) | $(31292) |
| **Other comprehensive loss:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net unrealized loss on available-for-sale securities | (192) |  | (381) |  |
| **Comprehensive loss** | $(20810) | $(6430) | $(67519) | $(31292) |

---

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**CASTLE BIOSCIENCES, INC.**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

**(in thousands)**

---

| | | |
|:---|:---|:---|
| | **December 31, 2022** | **December 31, 2021** |
| **ASSETS** | | |
| **Current Assets** | | |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $122948 | $329633 |
| &nbsp;&nbsp;&nbsp;Marketable investment securities | 135677 |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 23476 | 17282 |
| &nbsp;&nbsp;&nbsp;Inventory | 3980 | 2021 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 6207 | 4807 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 292288 | 353743 |
| Long-term accounts receivable, net | 1087 | 1308 |
| Property and equipment, net | 14315 | 9501 |
| Operating lease assets | 12181 | 7383 |
| Goodwill and other intangible assets, net | 126348 | 88922 |
| Other assets – long-term | 1110 | 1715 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | $447329 | $462572 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| **Current Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $4731 | $2546 |
| &nbsp;&nbsp;&nbsp;Accrued compensation | 24358 | 15483 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities | 1777 | 1179 |
| &nbsp;&nbsp;&nbsp;Other accrued and current liabilities | 5262 | 5678 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 36128 | 24886 |
| Noncurrent portion of contingent consideration |  | 18287 |
| Noncurrent operating lease liabilities | 11533 | 6900 |
| Deferred tax liability | 428 | 635 |
| Other liabilities | 90 | 124 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 48179 | 50832 |
| **Stockholders' Equity** |  |  |
| &nbsp;&nbsp;Common stock | 27 | 25 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 560409 | 505482 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (160905) | (93767) |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (381) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 399150 | 411740 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $447329 | $462572 |

---

------

**CASTLE BIOSCIENCES, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(in thousands)**

---

| | | |
|:---|:---|:---|
| | **Twelve Months Ended<br>December 31,** | **Twelve Months Ended<br>December 31,** |
| | **2022** | **2021** |
| **OPERATING ACTIVITIES** |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(67138) | $(31292) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 10543 | 3407 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation expense | 36321 | 21740 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of contingent consideration | (18287) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | (1877) | (8736) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accretion of discounts on marketable investment securities | (1368) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 158 |  |
| &nbsp;&nbsp;&nbsp;Change in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (6218) | (4631) |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (1224) | 617 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory | (1680) | 327 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease assets | 991 | 931 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets | 618 | (180) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 582 | (182) |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | (608) | (852) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued compensation | 8495 | 6208 |
| &nbsp;&nbsp;&nbsp;&nbsp;Medicare advance payment |  | (8350) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other accrued and current liabilities | (963) | 2286 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other liabilities |  | (276) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (41655) | (18983) |
| **INVESTING ACTIVITIES** |  |  |
| &nbsp;&nbsp;&nbsp;Purchases of property and equipment | (5632) | (3483) |
| &nbsp;&nbsp;Asset acquisitions, net of cash and cash equivalents acquired | 547 | (63184) |
| &nbsp;&nbsp;Acquisition of business, net of cash and cash equivalents acquired | (26966) |  |
| &nbsp;&nbsp;Proceeds from sale of property and equipment | 195 | 10 |
| &nbsp;&nbsp;Purchases of marketable investment securities | (134689) |  |
| &nbsp;&nbsp;Sales and maturities of marketable investment securities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (166545) | (66657) |
| **FINANCING ACTIVITIES** |  |  |
| &nbsp;&nbsp;&nbsp;Payment of common stock offering costs |  | (336) |
| &nbsp;&nbsp;&nbsp;Proceeds from exercise of common stock options | 833 | 4234 |
| &nbsp;&nbsp;&nbsp;Payment of employees' taxes on vested restricted stock units | (1688) | (781) |
| &nbsp;&nbsp;&nbsp;Proceeds from contributions to the employee stock purchase plan | 2492 | 2312 |
| &nbsp;&nbsp;&nbsp;Repayment of principal portion of finance lease liabilities | (122) | (8) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 1515 | 5421 |
| **NET CHANGE IN CASH AND CASH EQUIVALENTS** | (206685) | (80219) |
| &nbsp;&nbsp;&nbsp;Beginning of year | 329633 | 409852 |
| &nbsp;&nbsp;&nbsp;End of year | $122948 | $329633 |

---

------

**CASTLE BIOSCIENCES, INC.**

**Reconciliation of Non-GAAP Financial Measures (UNAUDITED)**

The table below presents the reconciliation of adjusted revenues and adjusted gross margin, which are non-GAAP financial measures. See "Use of Non-GAAP Financial Measures (UNAUDITED)" above for further information regarding the Company's use of non-GAAP financial measures.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Twelve Months Ended December 31,** | **Twelve Months Ended December 31,** |
| | **2022** | **2021** | **2022** | **2021** |
| *(in thousands)* |  |  |  |  |
| **<u>Adjusted revenues</u>** |  |  |  |  |
| Net revenues (GAAP) | $38338 | $25039 | $137039 | $94085 |
| &nbsp;&nbsp;&nbsp;&nbsp;Revenue associated with test reports delivered in prior periods | (806) | 780 | 1987 | (3324) |
| Adjusted revenues (Non-GAAP) | $37532 | $25819 | $139026 | $90761 |
| **<u>Adjusted gross margin</u>** |  |  |  |  |
| Gross margin (GAAP)<sup>1</sup> | $26603 | $19434 | $96764 | $76305 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of acquired intangible assets | 2215 | 1008 | 8266 | 1958 |
| &nbsp;&nbsp;&nbsp;&nbsp;Revenue associated with test reports delivered in prior periods | (806) | 780 | 1987 | (3324) |
| Adjusted gross margin (Non-GAAP) | $28012 | $21222 | $107017 | $74939 |
| Gross margin percentage (GAAP)<sup>2</sup> | 69.4% | 77.6% | 70.6% | 81.1% |
| Adjusted gross margin percentage (Non-GAAP)<sup>3</sup> | 74.6% | 82.2% | 77.0% | 82.6% |

---

________________________

1. Calculated as net revenues (GAAP) less the sum of cost of sales (exclusive of amortization of acquired intangible assets) and amortization of acquired intangible assets.

2. Calculated as gross margin (GAAP) divided by net revenues (GAAP).

3. Calculated as adjusted gross margin (Non-GAAP) divided by adjusted revenues (Non-GAAP).

The table below presents the reconciliation of adjusted operating cash flow, which is a non-GAAP financial measure. See "Use of Non-GAAP Financial Measures (UNAUDITED)" above for further information regarding the Company's use of non-GAAP financial measures.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Twelve Months Ended December 31,** | **Twelve Months Ended December 31,** |
| | **2022** | **2021** | **2022** | **2021** |
| *(in thousands)* |  |  |  |  |
| **<u>Adjusted operating cash flow</u>** |  |  |  |  |
| Net cash used in operating activities (GAAP) | $(6000) | $(2781) | $(41655) | $(18983) |
| &nbsp;&nbsp;&nbsp;&nbsp;Medicare advance payment<sup>1</sup> |  | 2999 |  | 8350 |
| &nbsp;&nbsp;&nbsp;&nbsp;HHS provider relief funds<sup>2</sup> |  |  |  | (1882) |
| Adjusted operating cash flow (Non-GAAP) | $(6000) | $218 | $(41655) | $(12515) |

---

________________________

1. We received an advance payment of $8.3 million from the Centers for Medicare & Medicaid Service (CMS), for which recoupment has commenced in April 2021. We recorded the receipt of the payment as a liability on our balance sheet and, in accordance with GAAP, it was included in net cash provided by (used in) operating activities in the period received. We have excluded receipt of the advance payment from adjusted operating cash flow, but as claims were submitted for reimbursement and applied against this balance, we included the advance payment in adjusted operating cash flow to the extent that Medicare claims submitted for reimbursement were applied to the balance.

2. We received a one-time payment of $1.9 million in relief funds automatically allocated to Medicare providers under the Coronavirus Aid, Relief and Economic Security Act (CARES Act) from the U.S. Department of Health and Human Services (HHS).

------

The table below presents the reconciliation of adjusted EBITDA, which is a non-GAAP financial measure. See "Use of Non-GAAP Financial Measures (UNAUDITED)" above for further information regarding the Company's use of non-GAAP financial measures.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Twelve Months Ended December 31,** | **Twelve Months Ended December 31,** |
| | **2022** | **2021** | **2022** | **2021** |
| *(in thousands)* |  |  |  |  |
| **<u>Adjusted EBITDA</u>** |  |  |  |  |
| Net loss | $(20618) | $(6430) | $(67138) | $(31292) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income<sup>(1)</sup> | (2275) | (17) | (3968) | (68) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | 4 | 1 | 17 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax expense (benefit) | 57 | (8725) | (1766) | (8720) |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization expense | 2841 | 1451 | 10543 | 3407 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation expense | 9923 | 6851 | 36321 | 21740 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of contingent consideration | (300) |  | (18287) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisition related transaction costs |  |  | 1711 |  |
| Adjusted EBITDA (Non-GAAP) | $(10368) | $(6869) | $(42567) | $(14932) |

---

1.&nbsp;&nbsp;&nbsp;&nbsp;Beginning in the fourth quarter of 2022, we began excluding interest income from the calculation of Adjusted EBITDA. Prior periods presented herein have been recast to conform to the current period presentation.

## Exhibit 99.2

![](exhibit992q422001.jpg)

Fourth Quarter 2022 February 28, 2023 Transforming Disease Management

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![](exhibit992q422002.jpg)

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![](exhibit992q422003.jpg)

3 Strong Performance in 2022 44,419 37,331 Total test reports Total Dermatology test reports 2022 2021 1See Non-GAAP reconciliations at the end of this presentation. 2Cash use includes acquisition of AltheaDx. $137.0M $139.0M Revenues Adj. Revenues1 70.6% 77.0% Gross Margin Adj. Gross Margin1 28,145 26,500 $94.1M $90.8M 81.1% 82.6% Expecting approximately $170 – 180 million in 2023 revenue $(41.7)M $(41.7)M Operating Cash Flow Adj. Operating Cash Flow1 $259M2 Cash, Cash Equivalents & Marketable Investment Securities as of end of period $(19.0)M $(12.5)M $330M $(67.1)M $(42.6)M Net Loss Adj. EBITDA1 $(31.3)M $(14.9)M

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![](exhibit992q422004.jpg)

4 $13.8 $22.8 $51.9 $62.6 $94.1 $137.0 2017 2018 2019 2020 2021 2022 10,614 13,445 17,055 18,185 28,145 44,419 2017 2018 2019 2020 2021 2022 Consistent Execution of Growth Initiatives Supports Long-Term Growth 2017-2022 Revenue 2017-2022 Total Test Report Volume 1 2 1Due to COVID-19, cutaneous melanoma diagnoses were down 20% for 2020; 2 Cutaneous melanoma diagnoses were down 11% for 2021. 58% 46%

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![](exhibit992q422005.jpg)

5 Presented three-year financial targets and strategic guideposts at 2022 Investor Day Developed expanded evidence supporting portfolio of innovative tests through the acceptance/publication of 14 peer- reviewed studies across all franchises Key 2022 Accomplishments Transition of IDgenetix clinical services from San Diego lab and the folding of operations into our Phoenix location TissueCypher granted ADLT status by Medicare, recognizing the test for providing clinical diagnostic information that cannot be obtained from any other test or combination of tests Delivered strong year-over-year growth in revenue (met top end of guided range) and test report volume (total test reports delivered in 2022 were 44,419 up 58% over 2021) 1ADLT=Advanced Diagnostic Laboratory Test

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![](exhibit992q422006.jpg)

6 Answering Clinical Questions to Guide Care Along the Patient Journey Our focus is on diagnostic support, risk stratification and therapy response areas of the patient care continuum Dermatology Ophthalmology Gastroenterology Mental Health Screening Diagnostic Support Risk Stratification Therapy Response MRD/Recurrence MonitoringPATIENT CARE JOURNEY Inflammatory Skin Disease Pipeline Test

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![](exhibit992q422007.jpg)

7 Estimated ~$8B U.S. Total Addressable Market1 for Commercially Available Tests Dermatology Gastroenterology Mental Health Cutaneous melanoma/ risk of metastasis, SLNB positivity risk Patients classified as Stage I, II or III2 ~$540M ~130K Cutaneous squamous cell carcinoma/risk of metastasis Patients w/high-risk features2 ~$820M ~200K Suspicious pigmented lesions/melanoma status Patients w/ diagnostically ambiguous lesions ~$600M ~300K Barrett's esophagus/risk of progression to esophageal cancer Patients receiving upper GI endoscopies/year who meet the intended use criteria for TissueCypher3 ~$1B ~415K Mental health therapy response Based on indicated use of IDgenetix for patients diagnosed with depression, anxiety and other mental health conditions ~$5B Tests in pipeline add an additional estimated ~$3.6B to our U.S. TAM ($1.9B for inflammatory skin disease pipeline test and ~$1.7B for additional dermatology pipeline tests) 1U.S. TAM = Total addressable market based on estimated patient population assuming average reimbursement rate among all payors.2Annual U.S. incidence for Stage I, II or III melanoma estimated at 130,000; annual U.S. incidence for squamous cell carcinoma estimated at 1,000,000 with addressable market limited to carcinomas with one or more high risk features; annual U.S. incidence for suspicious pigmented lesion biopsies estimated at 2,000,000 with addressable market limited to the 15% with an indeterminant biopsy.3415,000 upper GI endoscopies/year with confirmed dx of BE (ND, IND, LGD, EXCLUDING HGD) x $2,513 = U.S. only TAM of ~$1 billion

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![](exhibit992q422008.jpg)

8 Significant Scientific Evidence Through Robust Clinical Research Program Across Our Testing Portfolio 8 231 Committed/contributing clinical research sites at year-end 2022 ~12,000+ Patients enrolled in studies over lifetime of Castle2 ~11,200+ Patients1 enrolled in studies at year-end 2022 Data as of Dec. 31, 2022 1One TissueCypher study involves patients and ~250 physicians; 2Number reflects studies that span Castle's dermatology, ophthalmology and gastroenterology portfolios; 3SEER cancer registries linked CM cases diagnosed from 2013-2018 to data for patients with stage I-III CM tested with the 31-GEP as of Dec. 31, 2022; includes patients in studies not yet published; 4SEER cancer registries linked UM cases diagnosed in 2018 for patients with primary uveal melanoma tested with the 15-GEP; includes patients in studies not yet published. 13 Ongoing clinical research studies Ongoing collaboration with NCI/SEER has allowed for analyses of 9,200+ patients clinically tested with DecisionDx-Melanoma3 and 2,900+ patients clinically tested with DecisionDx-UM4 to date

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![](exhibit992q422009.jpg)

9 Expected publication of collaborative NCI study showing higher melanoma specific survival for patients tested with DecisionDx-Melanoma Expect new GI and MyPath commercial team expansion to reach optimal productivity in Q2 2023 Pittsburgh lab opening in Q2 2023, bringing Castle's total laboratory operations space combined to 52,000 square feet Further refinement of sales territories in our Derm, GI and Mental Health franchises Well Positioned for Continued Growth with Expected 2023 Catalysts Expect draft LCD for DecisionDx-SCC from Palmetto in 1H 2023

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![](exhibit992q422010.jpg)

10 Strong Growth in Our Foundational Dermatology Business Strong provider growth and continued adoption with ~2,312 new ordering clinicians and ~7,670 total ordering clinicians for our dermatologic tests for the year ended Dec. 31, 20221 1New ordering clinician =clinician who ordered a Castle dermatologic test for the first time. 26,500 37,331 Total Dermatology Test Reports 2021 2022

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![](exhibit992q422011.jpg)

11 DecisionDx-Melanoma Disease Specific Survival Outcomes Are Favorable Relative to Other Tests MSS mortality difference of 1.1% at 3 years when comparing tested and untested populations Sentinel lymph node biopsy (SLNB) • SLNB is a risk-stratification surgical procedure "test" in melanoma • MSLT-1 found that SLNB had no impact on 10-year melanoma-specific survival1 Tumor size P-value 10-yr MSS Thin (<1.2mm) Not reported Not impacted Intermediate (1.2-3.5mm) not significant (p=.18) Not impacted Thick (>3.5) not significant (p=.56) Not impacted BCSS mortality difference of 0.50% at 3 years when comparing tested and untested populations Breast Cancer Test2 3-yr BCSS\* Breast Cancer Test 99.6% Matched Untested 99.1% Absolute Mortality Difference 0.50% (p<0.05) . 3-yr MSS3 DecisionDx-Melanoma 97.7% Matched Untested 96.6% Absolute Mortality Difference 1.1% (p<0.05) Breast Cancer Test 1Morton et al. N Engl J Med 2014; 2Zhang et al. Breast Cancer Res Treat. 2020; 3Kurley et al. EADO 2022. \*https://apps.automeris.io/wpd/

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![](exhibit992q422012.jpg)

12 TissueCypher Is a Risk Stratification Tool for Patients with Barrett's Esophagus Low RiskHigh Risk • Indicated for NDBE, IND, and LGD • High Risk score enables increased surveillance or early intervention to prevent cancer • Low Risk score minimizes over treatment and supports extension of surveillance intervals to guideline recommendations Individualize 5-year risk of progression to HGD or EAC

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![](exhibit992q422013.jpg)

13 IDgenetix: Precision Medicine Designed to Streamline Medication Selection for Mental Health • Eliminate trial and error prescribing • 3 in 1 test: • Drug-gene interactions • Drug-drug interactions • Lifestyle factors Next Generation PGx • 2x improved chance of medication response vs. control • >2.5x improved chance of remission of depression symptoms vs. control Unrivaled Efficacy • 10 mental health and pain conditions in one report • <1 minute to collect DNA sample • 3-5 days to receive test report • Specialized sales and medical science liaison support Easy to Use Bradley et al. J Psychiatr Res 2018.

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![](exhibit992q422014.jpg)

Thank you

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![](exhibit992q422015.jpg)

15 Use Of Non-GAAP Financial Measures (Unaudited) In this presentation, we use the metrics of Adjusted Revenues, Adjusted Gross Margin, Adjusted Operating Cash Flow and Adjusted EBITDA, which are non- GAAP financial measures and are not calculated in accordance with generally accepted accounting principles in the United States (GAAP). Adjusted Revenues and Adjusted Gross Margin reflect adjustments to net revenues to exclude changes in variable consideration related to test reports delivered in previous periods but not recorded as revenues until a subsequent period. Adjusted Gross Margin further excludes acquisition-related intangible asset amortization. Adjusted Operating Cash Flow excludes the effects of repayments to Medicare of COVID-19 government relief advancements to healthcare providers. Adjusted EBITDA excludes from net loss interest income, interest expense, income tax expense (benefit), depreciation and amortization expense, stock-based compensation expense, change in fair value of contingent consideration, and acquisition-related transaction costs. We use Adjusted Revenues, Adjusted Gross Margin, Adjusted Operating Cash Flow and Adjusted EBITDA internally because we believe these metrics provide useful supplemental information in assessing our revenue and cash flow performance reported in accordance with GAAP, respectively. We believe that Adjusted Revenues, when used in conjunction with our test report volume information, facilitates investors' analysis of our current-period revenue performance and average selling price performance by excluding the effects of revenue adjustments related to test reports delivered in prior periods, since these adjustments may not be indicative of the current or future performance of our business. We believe that providing Adjusted Revenues may also help facilitate comparisons to our historical periods. Adjusted Gross Margin is calculated using Adjusted Revenues and therefore excludes the impact of revenue adjustments related to test reports delivered in prior periods, which we believe is useful to investors as described above. We further exclude acquisition- related intangible asset amortization in the calculation of Adjusted Gross Margin. We believe that excluding acquisition-related intangible asset amortization may facilitate gross margin comparisons to historical periods and may be useful in assessing current-period performance without regard to the historical accounting valuations of intangible assets, which are applicable only to tests we acquired rather than internally developed. We believe Adjusted Operating Cash Flow is also useful to investors as a supplement to GAAP measures in the assessment of our cash flow performance by removing the effects of COVID-19 government relief payment activity, which we believe are not indicative of our ongoing operations. We believe Adjusted EBITDA may enhance an evaluation of our operating performance because it excludes the impact of prior decisions made about capital investment, financing, investing and certain expenses we believe are not indicative of our ongoing performance, such as acquisition-related transaction costs. However, these non-GAAP financial measures may be different from non-GAAP financial measures used by other companies, even when the same or similarly titled terms are used to identify such measures, limiting their usefulness for comparative purposes.

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![](exhibit992q422016.jpg)

16 Reconciliation of Non-GAAP Financial Measures (Unaudited) The table below presents the reconciliation of adjusted revenues and adjusted gross margin, which are non-GAAP financial measures. See previous slide for further information regarding the Company's use of non-GAAP financial measures.

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![](exhibit992q422017.jpg)

17 Reconciliation of Non-GAAP Financial Measures (Unaudited) The table below presents the reconciliation of adjusted operating cash flow, which is a non-GAAP financial measure. See slide 15 for further information regarding the Company's use of non-GAAP financial measures.

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![](exhibit992q422018.jpg)

18 Reconciliation of Non-GAAP Financial Measures (Unaudited) The table below presents the reconciliation of adjusted EBITDA, which is a non-GAAP financial measure. See slide 15 for further information regarding the Company's use of non-GAAP financial measures.

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![](exhibit992q422019.jpg)

Appendix

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![](exhibit992q422020.jpg)

20 Leadership Team Overview

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