Revenue Performance - Revenue for Q1 2025 was $203.5 million, a 21% increase from $168.5 million in Q1 2024[4] - Total revenue for the three months ended March 31, 2025, was $203,471,000, representing a 20.7% increase from $168,491,000 in the same period of 2024[28] - The company raised its 2025 revenue guidance to $880 to $890 million, representing growth of 19% to 20%[1] Oncology Revenue - Oncology revenue grew 20% to $150.6 million, driven by a 25% increase in oncology test volume[4] - Oncology revenue increased to $150,559,000, up 19.7% from $125,748,000 year-over-year[28] Screening Revenue - Screening revenue was $5.7 million from approximately 9,000 Shield screening tests[5] - The company expects full year 2025 screening revenue to be in the range of $40 to $45 million, driven by Shield volume of 52,000 to 58,000 tests[14] Profitability and Margins - Gross profit was $128.7 million with a gross margin of 63%, up from 61% in the prior year[6] - GAAP gross profit for Q1 2025 was $128,748,000, up from $103,195,000 in Q1 2024, marking a 24.8% increase[30] - Guardant Health achieved positive gross margins for both Reveal and Shield in Q1 2025[5] Net Loss and Cash Flow - Net loss for Q1 2025 was $95.2 million, an improvement from a net loss of $115.0 million in Q1 2024[9] - GAAP net loss for Q1 2025 was $95,159,000, compared to a net loss of $114,985,000 in Q1 2024, reflecting a 17.3% improvement[31] - Non-GAAP net loss per share for Q1 2025 was $0.49, slightly higher than $0.46 in Q1 2024[31] - Free cash flow for the three months ended March 31, 2025, was $(67,148,000), compared to $(37,218,000) in the same period of 2024, indicating increased cash usage[35] Expenses and Liabilities - Research and development expenses for Q1 2025 were $88,521,000, compared to $83,802,000 in Q1 2024, reflecting a 5.2% increase[30] - Total assets decreased to $1,344,226,000 as of March 31, 2025, down from $1,485,609,000 at the end of 2024[26] - Total liabilities decreased to $1,595,015,000 as of March 31, 2025, compared to $1,625,256,000 at the end of 2024[26] - Total stockholders' deficit increased to $(250,789,000) as of March 31, 2025, from $(139,647,000) at the end of 2024[26] Pricing - Guardant360 average selling price (ASP) increased to $3,000 to $3,100 per test[5]

Group 1 - Guardant Health (GH) is expected to report a year-over-year decline in earnings, with a projected loss of $0.61 per share, representing a -32.6% change, while revenues are anticipated to be $191.1 million, up 13.4% from the previous year [3][10] - The earnings report is scheduled for April 30, 2025, and could influence the stock price depending on whether the results exceed or fall short of expectations [2][12] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating a stable outlook from covering analysts [4] Group 2 - The Most Accurate Estimate for Guardant Health is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -38.35%, suggesting a bearish sentiment among analysts [10][11] - Guardant Health has a Zacks Rank of 3, making it challenging to predict an earnings beat conclusively [11] - Historically, Guardant Health has beaten consensus EPS estimates three times over the last four quarters, but the last reported quarter showed a surprise miss of -24% [12][13] Group 3 - In comparison, Repligen (RGEN) is expected to post earnings of $0.35 per share for the same quarter, indicating a year-over-year increase of +25%, with revenues projected at $164.48 million, up 8.7% [17] - Repligen's consensus EPS estimate has been revised 0.4% lower in the last 30 days, but a higher Most Accurate Estimate has resulted in an Earnings ESP of 3.77%, indicating a likelihood of beating the consensus [18]

Core Insights - Guardant Health, Inc. is a biopharma company focused on liquid biopsy tests primarily for oncology applications, utilizing genomic and digital technology to analyze patients' DNA samples [1] Company Overview - The company specializes in developing liquid biopsy tests for various illnesses, with a strong emphasis on cancer-related applications [1] Technology and Approach - Guardant Health employs advanced genomic and digital technologies to conduct analyses of DNA samples from patients, which is central to their testing methodology [1]

Group 1 - The Centers for Medicare & Medicaid Services (CMS) approved the Advanced Diagnostic Laboratory Test (ADLT) status for Guardant Health's GH Shield blood test for colorectal cancer screening [1] - The FDA approved the Shield test in July 2024 as the first blood test for primary colorectal cancer screening, and Medicare already covers the test [1] - Starting April 1, the Shield test will be reimbursed at $1,495 during the initial nine-month ADLT period [1] Group 2 - During the initial ADLT period, Guardant Health will collect and submit private-payer payment rate data for the Shield test, with the median rate to be used by CMS for Medicare pricing starting January 1, 2026 [2] - The median rate will determine the payment amount for the Shield test from January 1, 2026, to December 31, 2027 [2] Group 3 - Palmetto GBA granted coverage for the Guardant Reveal test to monitor disease recurrence in colorectal cancer patients following curative intent therapy [3] - Securing ADLT status is seen as key to increasing average selling prices (ASPs) beyond previous guidance assumptions [3] - Analyst Andrew Brackmann views the update favorably and maintains an Outperform rating for Guardant Health [3] Group 4 - The ADLT status and price increase were not included in Shield's previous revenue guidance, which projected annual screening revenue between $25 million and $30 million, with volumes of 45,000 to 50,000 [4] - The increase in Medicare reimbursement from $920 to $1,495 could potentially add around $10 million in additional revenue, assuming the same mix as previously estimated [4] Group 5 - Guardant Health's stock price increased by 14.5% to $41.04 following the news [5]

Group 1 - Guardant Health (GH) is currently outperforming its Medical peers with a year-to-date return of 38.9%, compared to the average gain of 6.2% for Medical stocks [4] - The Zacks Consensus Estimate for GH's full-year earnings has increased by 4% over the past quarter, indicating stronger analyst sentiment and an improving earnings outlook [4] - Guardant Health is ranked 2 (Buy) in the Zacks Rank system, which highlights stocks with characteristics likely to outperform the market in the next one to three months [3] Group 2 - Guardant Health is part of the Medical - Biomedical and Genetics industry, which consists of 510 companies and is currently ranked 66 in the Zacks Industry Rank [6] - The Medical - Biomedical and Genetics industry has gained an average of 7% year-to-date, indicating that Guardant Health is performing better than its industry peers [6] - Brookdale Senior Living (BKD) is another Medical stock that has outperformed its sector with a year-to-date return of 12.1% and also holds a Zacks Rank of 2 (Buy) [5]

Financial Data and Key Metrics Changes - Q4 2024 revenue grew 30% year-over-year to $202 million, with total full-year revenue reaching $739 million, an increase of 31% year-over-year [14][48] - Clinical revenue increased 34% year-over-year, supported by ASPs and reimbursement tailwinds, with total oncology clinical volumes in Q4 increasing 24% year-over-year [14][44] - Non-GAAP gross margin improved to 63% in Q4 2024 from 61% in Q4 2023, and for the full year, it was 62% compared to 61% in 2023 [52][54] Business Line Data and Key Metrics Changes - Guardant360 test volumes saw double-digit growth in 2024, contributing significantly to clinical test volume growth of 20% for the full year [14][48] - The Guardant Reveal test, which received Medicare coverage for CRC surveillance, is expected to reach an important inflection point in 2025, with significant volume growth anticipated [22][27] - Biopharma revenue grew 31% year-over-year, driven by partnerships and the Smart Liquid Biopsy platform, which now represents over 50% of reported samples in new contracts [28][44] Market Data and Key Metrics Changes - The Shield assay received FDA approval and Medicare coverage for CRC screening, opening a market for early cancer detection with a favorable Medicare price of $920 [35][36] - The company is exploring international opportunities, including a screening program in Abu Dhabi, aiming to screen approximately 10,000 patients in the first year [39][121] - The NCCN guideline updates are increasingly recognizing the value of ctDNA testing, which supports the commercial strategy for Reveal [23][75] Company Strategy and Development Direction - The company aims to accelerate volume growth and product innovation in 2025, particularly in the Therapy Selection portion of its oncology business [10][21] - The transition to the Smart Liquid Biopsy platform is expected to enhance the capabilities of Guardant360 and drive greater depth of ordering [18][20] - The company plans to present revenue in four components for better clarity on performance, including Oncology, Biopharma and Data, Licensing and Other, and Screening [59] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving cash flow break-even by 2028, with cumulative free cash outflows expected to be between $450 million and $550 million over the next three years [58][65] - The company anticipates full-year 2025 revenues in the range of $850 million to $860 million, representing growth of approximately 15% to 16% compared to 2024 [60] - Management highlighted the importance of the upcoming ACS guidelines and ADLT status for Shield, which could further enhance ASPs and market penetration [62][124] Other Important Information - The company successfully reduced COGS for Reveal by over 50% in 2024, which is expected to contribute to improved gross margins in 2025 [25][63] - A significant litigation expense related to a false advertising trial resulted in a favorable outcome for the company, awarding $293 million [53] - The company ended the year with approximately $944 million in cash and equivalents, following a successful private convertible debt exchange [56] Q&A Session Summary Question: Can you discuss the sales force expansion for Shield and the expected contribution to revenue? - Management indicated that the sales force for Shield was increased from 50 to 100 reps, with expectations for a back-end loaded ramp in productivity due to the timing of new hires [70][72] Question: How does the NCCN guideline update affect Reveal's adoption? - Management expressed encouragement regarding the NCCN guidelines, viewing it as a step forward in recognizing the value of ctDNA testing, and they are confident in future adoption [74][75] Question: Are there discussions with commercial payers regarding Shield? - Early conversations with commercial payers are ongoing, with plans to ramp up engagement following guideline updates [78] Question: What ASP is embedded in the guidance for Reveal? - The expected ASP for Reveal is approximately $600, not including potential increases from ADLT designation [99] Question: What is the expected impact of the ACS guidelines on Shield? - Management anticipates that inclusion in ACS guidelines could serve as a catalyst for increased adoption and revenue, although it is not yet included in current guidance [124]

Conquering Cancer with Data Q4 2024 & Full Year 2024 Earnings Call February 20, 2025 Safe harbor and non-GAAP disclosures Certain statements in this presentation and the accompanying oral commentary are forward-looking statements within the meaning of federal securities laws. These statements relate to future events or Guardant Health, Inc. (the "Company")'s future results and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance ...

Core Insights - Guardant Health reported a strong revenue growth of 30% year-over-year, reaching $201.8 million, surpassing analysts' expectations of $192 million [2][3] - The company experienced a non-GAAP loss of $0.62 per share, which was better than the anticipated loss of $0.75 per share, while the net loss narrowed to $111 million [2][3][6] Business Overview and Focuses - Guardant Health specializes in precision oncology, focusing on advanced blood tests for cancer detection and management, particularly through liquid biopsies [4] - The company is prioritizing product innovation and strategic partnerships to enhance research capabilities and market access, with a focus on securing payer reimbursement [4][8] Quarterly Highlights and Developments - The precision oncology segment saw a 30% increase in sales, contributing $184.6 million to total revenue, aided by new Medicare reimbursement rates [5] - Operating expenses rose to $250.2 million, primarily due to increased spending on R&D, sales, and marketing, although the net loss was reduced due to the absence of a prior-year legal expense [6] Regulatory and Strategic Collaborations - Guardant Health achieved regulatory approvals, including Medicare coverage for its Guardant Reveal Smart Liquid Biopsy, enhancing its service offerings [7] - Collaborations with industry leaders like Boehringer Ingelheim and ConcertAI support the company's research initiatives and commitment to innovation [7] Future Projections - For 2025, Guardant Health anticipates revenue growth of 15% to 16%, projecting revenues between $850 million and $860 million, with oncology revenue expected to grow by approximately 15% [9] - The company aims to stabilize its non-GAAP gross margin between 62% and 63% and plans to control cash burn, projecting $225 million to $235 million for the year [9][10]

Regulatory Approvals and Compliance - The Shield blood test for colorectal cancer screening received FDA approval in July 2024 and became commercially available in August 2024, marking it as the first FDA-approved blood test for this purpose[37]. - The Guardant360 CDx test received CE mark for commercialization in the EU, with partnerships established in Spain and the UK for blood-based cancer testing services[53]. - In Japan, Guardant360 CDx test received regulatory approval as a companion diagnostic and national reimbursement approval for advanced solid tumor cancers[55]. - The FDA regulates medical devices under the Federal Food, Drug, and Cosmetic Act, requiring either a 510(k) clearance or PMA approval for new or significantly modified devices[95]. - Compliance with the EU In Vitro Diagnostic Medical Devices Directive (IVDD) is necessary for CE marking, which allows in vitro diagnostic medical devices to be marketed in the EU[128]. - The EU's new Regulation (EU) 2017/746 on in vitro diagnostic medical devices (IVDR) aims to enhance public health protection and is directly applicable across EU member states[134]. - The FDA may require approval of companion diagnostics at the same time as therapeutic products, ensuring adequate evaluation and performance characteristics[122]. - The MHRA has become the regulatory authority for Great Britain, requiring medical devices to be registered with them before market placement[139]. - Effective July 1, 2023, all medical devices in Great Britain require a UKCA mark for compliance[139]. - The IVDR will become applicable on May 26, 2027, strengthening market placement rules and enhancing device surveillance[135]. - Companion diagnostics will require conformity assessment by a notified body under the new IVDR classification system[137]. Product Performance and Development - The Shield test demonstrated 83% sensitivity in detecting colorectal cancer and 90% specificity in individuals without advanced neoplasia, exceeding performance criteria set by CMS for reimbursement[37]. - The company plans to expand into lung cancer screening and multi-cancer detection with the Shield platform, initiating a nearly 10,000-patient prospective study for lung cancer screening[38]. - The Guardant360 CDx test is the market-leading comprehensive liquid biopsy test, providing tumor mutation profiling for cancer patients with solid tumors[30]. - The Guardant Reveal test aims to improve early detection of recurrence in early-stage cancers, with the potential to identify high-risk patients more effectively than current methods[34]. - The Guardant360 Response test predicts treatment response eight weeks earlier than standard imaging scans, providing critical insights for treatment decisions[32]. - GuardantINFINITY test provides a comprehensive molecular profile of tumors with genotyping coverage of over 800 genes, enhancing biomarker discovery and clinical research[40]. - GuardantOMNI test covers 500 genes, achieving comparable analytical performance to the Guardant360 LDT test while improving sensitivity for detecting clinically actionable biomarkers[42]. - GuardantINFORM database offers longitudinal biological insights into tumor evolution and clinical outcomes, supporting drug discovery and clinical research[43]. - GuardantConnect software solution aims to connect patients with actionable alterations to relevant clinical studies, addressing the need for clinical study matching in oncology[44]. - The Smart Liquid Biopsy platform enhances research and development efficiencies, supporting cost savings and improved turnaround time for testing[45]. Financial Performance and Risks - The company has incurred significant losses since inception and may continue to do so, raising concerns about future profitability[22]. - The company relies heavily on a limited number of suppliers for laboratory instruments and materials, which poses risks to its operations[22]. - The reimbursement landscape is inherently variable, and future changes could adversely affect revenue and increase costs[70]. - The company anticipates that changes in payer policies could significantly increase total reimbursement for its tests[65]. - The company is actively working to broaden coverage among commercial payers, which may lead to increased average revenue per test performed[62]. - As of December 31, 2024, the company had cash, cash equivalents, restricted cash, and marketable debt securities totaling $944.2 million as of December 31, 2024[514]. - A hypothetical 100 basis point change in interest rates would have resulted in an immaterial change in the fair value of the company's investments[514]. - The majority of the company's revenue is generated in the United States, with insignificant revenue from foreign currencies as of December 31, 2024[515]. - A hypothetical 10% change in foreign currency exchange rates would not materially affect the company's financial condition or results of operations[515]. Employee and Diversity Initiatives - As of December 31, 2024, the company had 2,021 employees, with 1,999 being full-time[159]. - As of December 31, 2024, the company employed a workforce that was 55% racially/ethnically diverse and 54% female[161]. - For leadership positions, 32% self-identified as racially/ethnically diverse and 40% self-identified as women[161]. - Women held 30% of the independent director seats on the company's Board as of December 31, 2024[161]. - The company maintains an inclusive culture that values diversity and aims to drive innovation for the benefit of employees and the community[160]. - The company regularly utilizes employee engagement surveys to assess the effectiveness of its employee development and compensation programs[162]. - The total rewards package includes market-competitive pay, equity grants, and various benefits such as medical and retirement plans[163]. Legal and Regulatory Challenges - The company is subject to federal fraud and abuse laws, including the Anti-Kickback Statute and the False Claims Act[146]. - A civil investigative demand was received in January 2022 regarding billing for the Guardant360 panel of genetic tests[153]. - The company relies on a combination of patents and trade secrets to protect its intellectual property, with patents expected to expire between 2026 and 2041[85]. - Compliance with CLIA and state laboratory licensing requirements is critical, with potential enforcement actions for non-compliance including suspension or revocation of licenses[93]. - Clinical studies must comply with FDA's investigational device exemption regulations, and significant risk devices require an IDE application prior to human studies[113][114]. - The FDA's acceptance of an IDE application does not guarantee that the data will support the safety and effectiveness of the device[115]. - The FDA's Breakthrough Devices Program aims to expedite the development and review of medical devices that provide more effective treatment for life-threatening conditions, allowing for more timely access to qualifying devices[116]. - The FDA finalized a rule in May 2024 requiring LDTs to undergo premarket review as medical devices, set to be implemented in spring 2025, but this has faced legal challenges[120].

Company Overview - Guardant Health is a diagnostics company focused on cancer detection and monitoring through blood-based tests that provide molecular information about cancer, representing a market opportunity exceeding $100 billion [1] Investment Strategy - Narweena, an asset manager led by Richard Durant, seeks to identify market dislocations caused by misunderstandings of long-term business prospects, aiming for excess risk-adjusted returns by focusing on companies with secular growth opportunities in markets with entry barriers [1] - The investment approach emphasizes company and industry fundamentals to uncover unique insights, with a preference for smaller cap stocks and markets where competitive advantages are not immediately apparent [1] Market Dynamics - The aging population, low population growth, and stagnating productivity growth are expected to create new investment opportunities distinct from historical trends, with some industries facing stagnation or secular decline, potentially improving business performance due to reduced competition [1] - Conversely, certain businesses may encounter rising costs and diseconomies of scale, while economies increasingly favor asset-light businesses, leading to a decline in infrastructure investment needs over time [1] - A significant amount of capital is pursuing a limited set of investment opportunities, resulting in rising asset prices and compressed risk premia [1] Leadership Background - Richard Durant holds undergraduate degrees in engineering and finance from the University of Adelaide and an MBA from Nanyang Technological University, along with having passed the CFA exams [1]