Just caught up on Exact Sciences' Q4 earnings and honestly, it's a mixed bag worth keeping on my watchlist. Revenue came in at $878.4 million, up over 23% year-over-year and beat expectations by 2.1%, which is solid. Full-year revenues hit $3.25 billion with 17.8% growth, so the top line is firing on all cylinders. The Screening segment especially crushed it with $695.1 million in revenue, up 26% YoY.

What caught my attention though is the margin story. Gross margin expanded 106 basis points to 70.1%, which is encouraging given how competitive the diagnostics space is. But here's where it gets concerning—R&D expenses jumped 96% to $191.5 million and they're still running an adjusted operating loss of $82.2 million. The net loss widened to 21 cents per share versus 6 cents a year ago. That's not great.

Also, the Abbott merger agreement they announced back in November is still pending regulatory approval, expected to close in Q2 2026. That adds some uncertainty to the near-term outlook. The stock barely moved on the earnings (up 0.07%), which tells you the market's already pricing in the deal dynamics. Keeping this on my watchlist but the execution risk on expenses is real. Better-ranked names in the med-tech space like Intuitive Surgical and Cardinal Health are looking more attractive right now from a risk-reward perspective.