Natera, Inc. Q2 FY2025 earnings call

• Revenue: $547 million generated, 32% growth y-o-y; ex true-ups, 34% organic growth. • Volume: 189,000 oncology tests processed, 20,000 sequential growth units; new patient starts doubled previous quarterly record. • Gross Margin: 63.4% in Q2, up from ~59% last year. • Product Launches: Fetal Focus NIPT for inherited conditions launched; Signatera Genome launched earlier. • Clinical Studies: Women's health: Fetal Focus test validated via EXPAND trial; Organ Health: PEDAL study published in AJT on kidney transplant outcomes; Oncology: DARE trial results at ASCO, TEODOR trial in breast cancer; GI Cancers: Signatera growing in pancreatic, liver, gastroesophageal cancers with peer-reviewed publications. • AI Initiatives: AI-based foundation models developed for diagnostics, clinical insights, and therapeutic development.

Natera generated $547 million in revenue in Q2 2025, representing 32% growth over Q2 of the previous year. Excluding revenue true-ups, revenues grew 34% year-on-year. The product portfolio saw strong growth across all segments, with Signatera achieving an all-time record. Oncology tests processed were 189,000, a nearly 20,000 unit growth from Q1 2025. Gross margin was 63.4% in Q2, up from approximately 59% in Q2 2024. Signatera contributed significantly to the revenue growth, with strong volume and new patient starts driving the performance.

• Revenue guidance reset to $2.02 billion to $2.1 billion, up $80 million at midpoint. • Gross margin guide raised to 61% to 64% due to strong first-half performance. • OpEx held flat despite revenue growth; investments in growth and margin expansion ongoing. • Cash flow expected to be positive for the full year.

• Reimbursement challenges for non-covered tumor types; achieving Medicare coverage for these could be impacted by trial outcomes and payer decisions. • Uncertainty in clinical trial results affecting product adoption and revenue. • Market competition could impact growth and market share.

Q: Could you provide more color on what drove Signatera volumes, including new patient starts and new indications?

A: Strong data from ASCO GI, broad adoption in various tumor types, and new patient starts doubling previous records drove growth. New indications in colorectal, breast cancer, immunotherapy monitoring, and broader tumor types contributed.

Q: What are some key clinical readouts to look forward to in the next 18-24 months?

A: IMvigor011 trial (FDA-enabling), PROCEED trial readout in late fall, and various breast cancer and GI cancer studies.

Q: Can you provide details on the timeline for PROCEED and FIND trials?

A: PROCEED trial readout in late fall; FIND trial enrollment ongoing, expected to be complete by late 2026 with results in 2027 for FDA submission.

Q: How should we think about the penetration of Signatera and the $250M to $300M Medicare coverage opportunity?

A: Signatera has low single-digit penetration broadly; Medicare coverage for non-covered indications could add $250M to $300M in annual revenue and gross profit over the next few years, with multiple submissions in progress.