Shares of GeneDx Holdings (NASDAQ: WGS) surged 5.31% in pre-market trading on Thursday following the company's release of better-than-expected first-quarter 2025 results and raised full-year guidance. The genetic testing specialist demonstrated robust growth and improved profitability, signaling continued momentum in its core business.

GeneDx reported Q1 2025 revenue of $87.1 million, with exome and genome revenue growing an impressive 62% year-over-year to $71.4 million. The company's adjusted gross profit increased 56% to $59.7 million, while adjusted gross margin expanded to 69% from 61% a year ago. Notably, GeneDx achieved its third consecutive quarter of profitability, with adjusted net income of $7.7 million.

CEO Katherine Stueland commented on the results, stating, "Our team's work surpassed our expectations and delivered a strong first quarter with revenues exceeding $87 million and our third consecutive quarter of profitability. We're raising guidance for the year to $360 million to $375 million, successfully building on last year's momentum and strengthening our industry-leading position."

The company's growth is being driven by several factors, including expansion into new clinical indications and the recent launch of its ultraRapid Genome Sequencing product with a 48-hour turnaround time. GeneDx is also making progress in the neonatal intensive care unit (NICU) market, with expectations for volume ramp-up in the second half of the year. Additionally, the announced acquisition of Fabric Genomics is set to enhance GeneDx's AI-powered genomic interpretation capabilities and add a recurring software-based revenue stream.

Despite the strong results, GeneDx faced some challenges in the first quarter, including weather-related disruptions and typical seasonality affecting test volumes. The company also noted potential risks around Medicaid reimbursement changes. However, management remains confident in achieving at least 30% growth in exome and genome volume and revenues for the full year 2025.

As GeneDx continues to expand its market presence and improve its product offerings, investors appear optimistic about the company's growth trajectory. The pre-market stock surge reflects positive sentiment towards GeneDx's strong financial performance and raised guidance for 2025.