Castle Biosciences Inc (NASDAQ:CSTL) Surges After Posting Strong Q2 2025 Earnings Beat

Castle Biosciences Inc (NASDAQ:CSTL) reported second-quarter 2025 earnings that significantly surpassed analyst expectations, driving a sharp positive reaction in after-hours trading. The company’s performance highlights strong execution in its core diagnostic testing business, particularly in its key revenue drivers.

Earnings and Revenue Beat Estimates

• Revenue: Reported at $86.19 million, well above the consensus estimate of $72.83 million, marking a ~18% beat.
• Earnings Per Share (EPS): Came in at $0.15, a notable improvement compared to the estimated loss of $0.53 per share.

The substantial revenue growth was driven by a 33% year-over-year increase in test reports for the company’s primary products, DecisionDx®-Melanoma and TissueCypher®. This suggests strong adoption of Castle’s genomic testing solutions among physicians and patients.

Market Reaction

Following the earnings release, shares surged ~6.1% in after-hours trading, reflecting investor optimism about the company’s outperformance. This stands in contrast to the stock’s recent performance, which had declined ~27.8% over the past month and ~11.4% over the past two weeks prior to the earnings announcement. The sharp rebound indicates that the market had not priced in such a strong beat, particularly on profitability.

Analyst Estimates for Future Quarters

Looking ahead, analysts remain cautious about the company’s full-year profitability, with an estimated 2025 revenue of $299.77 million but an expected net loss of $2.43 per share. For Q3 2025, the consensus projects:

• Revenue: $68.12 million
• EPS: -$0.68

While the company did not provide explicit guidance in its press release, the Q2 beat suggests potential upside to these estimates if current growth trends persist.

Key Takeaways from the Press Release

• Strong Test Volume Growth: The 33% YoY increase in test reports for DecisionDx-Melanoma and TissueCypher underscores continued demand for Castle’s diagnostic solutions.
• Profitability Improvement: The positive EPS of $0.15 is a meaningful turnaround from the expected loss, indicating better cost management or higher-than-anticipated test margins.

For a deeper dive into Castle Biosciences’ earnings and future estimates, visit the earnings and estimates page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult a financial advisor before making any decisions.