Natera, Inc. Q4 FY2025 earnings call

• Test Processing: Around 924,000 tests were processed in Q4, with MRD clinical units at 225,000, a 56% year - on - year growth. - Revenue: $666 million in Q4, a 40% year - on - year rise, $6 million above the pre - announcement. - Gross Margin: 66.9% in Q4, organic gross margin excluding true - ups was 63.7%, and there was a 240 basis points organic step - up quarter - over - quarter. - Product Highlights: Expanded the MRD product portfolio by launching the genome version of Signatera and the Latitude MRD test; rolled out the 21 - gene Fetal Focus single - gene NIPT test; completed enrollment in the ACES - EMB trial in organ transplant; had exciting data presentations at ASCO GU in oncology; submitted the Latitude Tissue - Free MRD test to MolDx; integrated phased variant technology from the acquisition of Foresight Diagnostics into the Signatera platform.

In the fourth quarter of 2025, Natera processed approximately 924,000 tests. The MRD clinical unit growth was significant, with 225,000 tests processed in Q4 and a year - on - year growth of about 56%. Revenue for the quarter was $666 million, representing a 40% year - on - year increase. The gross margin was 66.9%, and when excluding the revenue true - ups, the organic gross margin was 63.7%. Signatera had an average selling price (ASP) of roughly $1,225 in Q4. Oncology, women's health, and organ health all contributed to the revenue. More than 50% of oncologists in the United States ordered the Signatera test in Q4, marking a significant adoption. Revenues were $6 million higher than the pre - announced amount due to strong overall volume growth and sequential improvement in ASPs. The gross margin showed excellent execution in Q4, with the top - line gross margin being a record 66.9%, and the organic gross margin saw a 240 basis points sequential increase.

• Revenue: Natera expects to generate between $2.62 billion and $2.7 billion in revenues in 2026. - Gross Margin: The gross margin is anticipated to be between 63% and 65%. - OpEx: At the midpoint, operating expenses are slated to grow by approximately 9.5%. - ASP: Signatera has around $30 of embedded ASP growth in the initial guide, with upside potential from broader reimbursement and operational improvements. - Quarter Pacing: Signatera and Prospera are expected to grow sequentially quarter - over - quarter throughout the year. For women's health, there is usual seasonality with Q1 being a big volume quarter, Q2 being sequentially down, and Q3 and Q4 recovering to Q1 levels.

Q: Regarding Signatera ASPs, especially on the Medicare side and the mix by indication.

A: The changes on the ADLT rate and the bundle approximately offset each other. Signatera's mix has CRC as a major part currently, but other tumor types are accelerating.

Q: About Signatera volume and data catalysts.

A: The trailing 4 - quarters average for Signatera units is around 20,000, and there are various data studies in different tumor types.

Q: Concerning the marketing of the fetal - focused product.

A: The fetal - focused test is seeing interest, with volume increasing and flexible ordering.

Q: Regarding Signatera's tumor types and mix.

A: CRC is a significant driver at present, but other tumor types are growing, and the mix includes exome, genome, and Latitude with exome being the majority.

Q: About lymphoma and multiple myeloma in the Signatera framework and the Japan launch.

A: The contribution from lymphoma and multiple myeloma in the 2026 framework is limited but has upside potential. Japan is expected to launch with preliminary coverage and a built - out sales force.

Q: About women's health market share.

A: Natera had a record year in women's health with Q1 being a big volume quarter.

Q: About SG&A and revenue growth.

A: SG&A is kept flat by having built out commercial teams in oncology that are ready to drive more top - line growth.

Q: About the OpEx guide and the ROI on R&D.

A: The OpEx guide shows operating leverage, and R&D for Signatera drives volume growth and ASPs through clinical trials and guideline inclusion, with clear return on invested capital implications.