Natera, Inc. Q1 FY2025 earnings call

• Revenue grew 37% to $502 million, with strong volume across all areas including 855,000 units processed. - Women's Health had outstanding volume growth, Signatera clinical volumes up 52% year-on-year. - Gross margins were 63% in the quarter, with margin expansion seen. - At ISHLT, Prospera showed positive results in heart transplantation. - Upcoming presentations at ESMO and ASCO with significant data on Signatera in various tumor types. - Signatera ASPs expected to increase with Medicare Advantage reimbursement and potential guideline impacts. - Organ Health's Prospera and Renasight have margin accretive potential. - Long-term goal to reach gross margins above 70%.

Natera generated $502 million in revenue in the first quarter of 2025, compared to $368 million in Q1 of the previous year, representing approximately 37% growth. Volume was strong with 855,000 units processed. Women's Health saw a sequential growth of over 40,000 units. Signatera clinical volumes grew 52% year-on-year and increased by roughly 16,500 units compared to Q4. Gross margins were 63% in the quarter, and after excluding true-ups, grew more than 110 basis points compared to Q4. Cash generated was $23 million.

• Raised revenue guide by about $70 million at the midpoint, expecting revenue in the range of $1.94 billion to $2.02 billion for 2025. - Gross margin guide held at 60% to 64% for the full year. - SG&A and R&D modestly increased to maximize out-year growth. - Aim to remain cash flow breakeven, with $23 million cash generated in Q1.

• Competitive pressure from new entrants in the market. - Uncertainty in reimbursement policies which could impact ASPs. - Potential short-term headwinds from new product launches.

Q: About the sequential volume growth in Signatera, what drove it and is it sustainable?

A: The resonance of data, clinical utility, commercial presence, and user experience drove the growth, and they expect it to be sustainable.

Q: On Signatera volume by indication, which indication had the greatest sequential growth?

A: Strong growth across all tumor types, pan cancer.

Q: On the screening front, what's the status of the PROCEED study?

A: The PROCEED study met the goal of enrolling more than 3,000 patients and data will be read out toward the end of the year; the FIND study has the first patient in this month.

Q: On ASPs in Women's Health, what gives confidence in them remaining flat to slightly up?

A: The strong operation to drive ASPs, with opportunities in coverage and guidelines.