Natera, Inc. Q1 FY2026 earnings call

• Revenue growth: $697 million in Q1, 39% growth year-on-year. • Women's health: Core business grew well, Fetal Focus launch exceeding expectations with approaching 200 thousand annualized orders, supported by EXPAND trial success. • Oncology: 249 thousand clinical oncology units processed, 55% growth year-on-year, with strong volume performance in core indications and growth from other cancer types. • Gross margins: Exceeded midpoint guide of 64% set in February, though Q1 volumes impacted margins due to work-in-process in lab. • R&D: Bumped by $50 million for oncology clinical trials, FIND ECD study to be fully enrolled in Q3 2026. • Signatera: ASPs at $1,250, with long-term target of $2,000 per test, and many histologies in submission to Medicare. • Clinical highlights: Signatera showing ability to help avoid surgery in bladder, rectal, and breast cancer; ALPHA3 trial interim analysis showing positive results; TOMER concept taking off across various cancer types.

In Q1 2026, revenues were $697 million, a 39% growth year-on-year. Women's health core business grew exceptionally well with the Fetal Focus product launch approaching a run rate of nearly 200 thousand orders. Oncology processed 249 thousand clinical oncology units, 55% growth year-on-year. Signatera ASPs reached roughly $1,250. Gross margins came in at just under 65%, exceeding the midpoint guide of 64% set in February. Revenue guide range was reset by over $120 million and gross margin guidance increased to 65% at the midpoint. R&D expectations bumped by $50 million for oncology clinical trials like FIND ECD study which is set to be fully enrolled in Q3 2026.

• Revenue guide: Reset by more than $120 million at the midpoint. • Gross margin guidance: Increased to 65% at the midpoint, with tailwind expected in send-to-receive ratio in subsequent quarters. • R&D: Bumped by $50 million for oncology clinical trials to pull forward enrollment. • ASPs: Anticipate exiting 2026 at roughly $1,275 with upside potential from private payers and expanding Medicare coverage to new indications.

• Work-in-process in lab impacted Q1 gross margins, though expected to normalize. • Prior authorization by payers could impact ASPs if not limited. • Winter storms in January impacted volumes to some extent, though still had a strong quarter despite it.

Q: On gross margin, could have gone further, are you holding back due to MRD mix?

A: Biased towards upside but looking out for risk factors, unit economics and ASPs looking clean with potential upside.

Q: On SG&A, Q1 elevated, any one-timers?

A: Q1 often elevated with one-timers like non-cash charges, backing out those, SG&A guide for rest of year is confident.

Q: On volumes, 92% recognized in quarter vs 95%-96%, unusual?

A: Not unusual, high volume in Q1 led to work-in-process, expected to normalize in subsequent quarters.

Q: On Fetal Focus share trends and women's health pricing pressure?

A: Fetal Focus launch going well, women's health core business grew 63 thousand units quarter over quarter, with potential from pan-cancer and MolDx submissions.

Q: On Signatera volumes momentum, build going forward?

A: Consistent growth in new patients, repeat rates strong, doctors expanding usage and new customers trying the product.

Q: On Zenith ramping and rare disease dynamics?

A: Zenith launch going well, early stage, not impacted by others' dynamics, CRC launch in Japan near, PMA data readout in 2027.

Q: On CRC launch in Japan and biomarker states?

A: Japan has same CRC diagnoses as US, off to races near, biomarker states seeing gradual improvement with commercial payers complying.

Q: On CRC screening asset cost ramp and Signatera momentum?

A: R&D cost for FIND trial reflected in guide, commercialization costs leg into, Signatera seeing same-account expansion and new ordering accounts.

Q: On MRD reps ramping and Signatera growth?

A: MRD reps between 50%-75% ramped, contributing to growth, with opportunities in new areas like lymphoma.

Q: On winter storm impact and Signatera surveillance adherence?

A: Winter storms impacted volumes but still had strong quarter, surveillance adherence varies but good with potential to increase.

Q: On prior authorization and Foresight phased variants?

A: Prior authorization limits could be tailwind, Foresight updated Signatera with phased variants coming later this year, reception positive