Shares of MDxHealth SA (NASDAQ: MDXH) went on a tear Friday, surging more than 127% after the diagnostic company posted its second-quarter results. The market's enthusiasm wasn't just about the numbers, though those were mostly good. It was about the story the numbers told: a company that's finally seeing its strategy pay off.

The headline numbers were a bit of a mixed bag. MDxHealth reported a loss of 18 cents per share, which was a couple of cents worse than the 16-cent loss analysts had penciled in. But revenue told a different story. Sales jumped 16% year-over-year to $27.20 million, beating the consensus estimate of $25.884 million. When you beat on the top line by that much, investors tend to forgive a small miss on the bottom line.

Test Volumes: A Tale of Two Businesses

Digging into the operational details, the company's test volumes paint a picture of transition. Tissue-based tests, which include Confirm mdx and GPS mdx, came in at 12,525 for the quarter. That's a 1% dip from the same period last year, but here's the encouraging part: it's a 13% jump sequentially. The sequential growth suggests the company is getting back on track after some post-acquisition turbulence.

Meanwhile, the liquid-based tests are a different story. The company reported 13,578 liquid-based tests (Exo mdx) in Q2, compared to 4,455 Select mdx tests in the year-ago period. That's a massive leap, though it's important to note the comparison isn't apples-to-apples since the product mix has changed.

CEO Michael McGarrity struck an optimistic tone, saying, "We expect our tissue growth rates to accelerate further throughout the second half of the year, driving a return to positive adjusted EBITDA as we exit 2026. These results underscore our track record of operating discipline and commercial execution. Combined with a strengthened balance sheet, we are well-positioned to drive sustainable revenue growth and profitability."

Strategic Moves and a Cleaner Balance Sheet

MDxHealth has been busy behind the scenes, and not just with routine operations. The company highlighted the recent peer-reviewed publication of the GPS PROMPT results from the Oxford study. Along with ongoing AI initiatives, this provides what management calls "compelling support" for expanding market conversion and share gains in the active surveillance population, ahead of the landmark PROTECT study.

In a strategic pivot, MDxHealth decided to discontinue its Resolve UTI offering to focus on its core prostate cancer business. The wind-down was completed in Q2, with the permanent closure of its wholly-owned subsidiary Delta Laboratories and its Plano, Texas lab. Sometimes you have to cut your losses to win the bigger game.

Financially, the company made some notable moves. Gross profit rose 11% to $17.9 million, up from $16.1 million a year ago. More importantly, MDxHealth eliminated a $10.4 million contingent liability to Novitas from its corporate structure. And it strengthened its cash position through a registered direct financing of $20 million. That's the kind of housekeeping that gives investors confidence.

Guidance: Looking Ahead with Confidence

For the full year 2026, MDxHealth reaffirmed its sales guidance of $110 million to $115 million. That's well above the consensus estimate of $98.814 million, and it represents 20-26% growth over 2025, excluding the discontinued Resolve business.

The company acknowledged that the tissue-based business took a hit in Q4 and Q1 due to the integration and sales force restructuring following the ExoDx acquisition. But it's already seeing the recovery, with a sequential increase of more than 1,400 tissue-based tests in Q2. That's a concrete sign that the restructuring is starting to pay off.

At the time of publication Friday, MDxHealth shares were trading at $1.04, up a whopping 127.25%. It's a big move, but for a company that's been through the wringer and is now talking about positive EBITDA, the market seems to be saying: finally, some good news.