Shares of GeneDx Holdings (WGS) nosedived 33.68% in pre-market trading on Wednesday, despite the company reporting better-than-expected first-quarter revenue. The sharp decline reflects investors' growing concerns about the genetic testing firm's path to sustainable profitability.

GeneDx announced Q1 2025 revenue of $87.1 million, surpassing the analyst estimate of $79.5 million. However, the company reported a net loss of $6.5 million for the quarter. While GeneDx highlighted an adjusted net income of $7.7 million, the significant difference between GAAP and non-GAAP figures appears to have raised red flags among investors about the company's true financial health.

Adding to the mixed signals, GeneDx provided full-year revenue guidance of $360 to $375 million, which aligns with or slightly exceeds the current consensus view. However, the lack of a clear profitability outlook seems to have contributed to investor unease. The substantial pre-market drop indicates that market participants are reassessing the company's valuation, prioritizing bottom-line performance over top-line growth despite the revenue beat.