CAP Review and Forecast: 2025 Financial Update

Dr. Alfred Campbell:
The executive team has done an excellent job, and the staff and all, all staff have done a really good job at managing expenses.

Nancy Johnson:
Welcome to a series of conversations featuring council chairs from the College of American Pathologists. They highlight the successes of 2025, look ahead to 2026, and give us a window into who they are and why they're passionate about the work they do. I'm Nancy Johnson, and I'll bring you their stories. Dr. Alfred Campbell serves as secretary-treasurer for the CAP and is a member of the Board of Governors. Lower operating expenses in 2025 strengthened the organization's financial position as the CAP completed its enterprise resource planning or ERP systems upgrades.

Dr. Alfred Campbell:
Yes, they were definitely below budget this year. There was a couple of factors involved in that. With the new ERP. There were some delayed projects that were also involved. So some projects we didn't go ahead in ‘25 that we had anticipated because of uh some lingering issues with the ERP.

Nancy Johnson:
Dr. Campbell credits the CAP with good cost management that contributed to the organization's overall financial health.

Dr. Alfred Campbell:
We had some headwinds in '24 and people really tightened their belt and did what was necessary in ‘25 to get us where we are today. So I think they've really done a great job. It’s not quite over yet in the sense that you know the goal ultimately is not to simply try to break even. Now for ’25, the actual final numbers are such that it looks like we did really well, right? And we did, so there's no doubt about that. But because of some things, as I mentioned, with the delay from the ERP progress, plus we didn't fill some spots right away. Those will likely be filled this year. So there are some changes, but in general, the goal will be to have you know a positive EBITDA every year versus a break-even EBITDA, which has been historically what we've done at the CAP.

Nancy Johnson:
Revenue is still on the rise, but at a more measured pace as the CAP adjusts to a changing market.

Dr. Alfred Campbell:
Yeah, overall, the organization is very strong. Not only are we continuing to grow our revenue, you know. I think the last four years, compounded annual growth rate is about 4.4 percent. In the past, we had hoped to hit 5%, so it's lower, but we have reset those expectations, so that's more in line with where we think we're gonna be, at least for now, which is closer to 4.5 percent. And it may actually end up going lower, even to 4% for us, because our market within the US and Canada is pretty mature, so really most of this growth rate is coming from international or from price increases, and price increases really aren't a way to grow your business.

Nancy Johnson:
Dr. Campbell is looking to the future and ways to diversify the CAP's business.

Dr. Alfred Campbell:
About 94% of all of our revenue comes from our quality solutions area, which is accreditation and proficiency testing. And so right now that is the main driver, and in the future that's gonna continue to be the main driver for the next number of years for sure. And our growth is really expected to come from international, so we're gonna continue to do the best we can to increase our international footprint. To that end, we've recently hired a vice president of supply chain logistics. That individual is going to help us with, especially with the international portion of this. We do have a number of issues in different countries with getting materials in and getting them there not broken and usable. So we need to we need to really strengthen that in order to continue to grow our business internationally. So the other thing is for the future, the hope is that we'd be able to diversify a little bit of our business. So while the proficiency testing and accreditation is the bread and butter of the CAP, we do like to see if there aren't any other opportunities out there that might allow us to decrease our dependence on just those two parts of the business.

Nancy Johnson:
Who was Dr. Campbell before he became a pathologist and secretary-treasurer of the CAP? Well, he grew up in a small town of about 2,500 people, a few hours outside San Antonio, Texas.

Dr. Alfred Campbell:
I figured I'd be a family practitioner or a surgeon because that's what you know on TV. At least when I was growing up, that's what you knew, so that's what I would be. And then I did those rotations and realized that I'm a little more of a talker, and it's gonna be hard to get all that stuff done. And you know, and I grew up in a small town, so family practitioner, they come in, and I mean it you don't just spend 10 or 15 minutes with them because it's a small town. I mean, people have come and spend a half hour, 45 minutes.

Nancy Johnson:
Ultimately, he decided to become a pathologist, and he was methodical and deliberate about building his resume and assuming leadership roles in the CAP.

Dr. Alfred Campbell:
Well, I think that's really important. You know, so many people, especially I feel like sometimes the younger generation, well, because I know my kids, you know, there are a lot of people at that age now, that's like they wait for things that just kind of happen to them, right? That it's gonna just work out. And I'm I've always been more of a believer in making things happen. And so, you know, if there's something you want to do, put yourself in a situation that's gonna get you to where you need to be. Don't just assume it's gonna just work out.

Nancy Johnson:
Read the full annual report to learn more and be sure to check the show notes. In the days ahead, we'll visit with other council chairs to learn about their work and what's coming up this year. For the College of American Pathologists, this is Nancy Johnson. Have a great day.