Adaptive's 2025 Financials Show MRD Momentum but Profitability and Cash Concerns Linger

What happened

Adaptive Biotechnologies reported its Q4 and full year 2025 financial results, highlighting growth in its MRD diagnostics segment driven by clonoSEQ adoption and expanded Medicare coverage. Full-year revenue likely increased, though the company may have missed its targeted MRD profitability for 2025, indicating ongoing execution challenges despite management's earlier guidance. Cash burn remained within the reduced $50–$60M range, but liquidity pressures persist as reserves deplete, raising questions about future funding needs. The termination of the Genentech collaboration further narrows the therapeutic pipeline, reinforcing a singular focus on MRD that lacks diversification. These results underscore a business model in transition, where regulatory and reimbursement tailwinds are partially offset by operational inefficiencies and financial sustainability risks.

Implication

The 2025 financials confirm Adaptive's MRD growth trajectory, but the missed profitability target signals operational headwinds that could delay breakeven and strain investor confidence. Reimbursement stability remains a critical lever; any adverse policy shifts could quickly erode revenue gains and undermine the core thesis. Cash management is now paramount, with liquidity concerns potentially necessitating dilutive capital raises if burn rates don't improve further. The loss of therapeutic optionality from the Genentech wind-down concentrates risk in diagnostics, reducing long-term upside and increasing dependence on MRD scale. Overall, while the MRD strategy is defensible, investors must weigh growth potential against persistent profitability and cash flow challenges before adjusting positions.

Thesis delta

The 2025 results partially validate the BUY thesis by showing MRD revenue growth and controlled cash burn, but the missed profitability target and ongoing liquidity concerns introduce new execution risks. This shifts the stance from a confident BUY to a more cautious HOLD, as investors await clearer evidence of sustainable profitability and reduced financial strain before considering upgrades.