Natera (NasdaqGS:NTRA) Q3 2025 Earnings Call November 06, 2025 04:30 PM ET Company ParticipantsSolomon Moshkevich - President of Clinical DiagnosticsSteve Chapman - CEOCasey Woodring - Vice President of Equity ResearchSubbu Nambi - Managing Director and Healthcare Equity ResearchPuneet Souda - Senior Managing Director of Life Science Tools and DiagnosticsAlex Aleshin - General Manager of Oncology and Chief Medical OfficerMichael Brophy - CFOConference Call ParticipantsDoug Schenkel - Managing Director and S ...

Natera (NasdaqGS:NTRA) Q3 2025 Earnings Call November 06, 2025 04:30 PM ET Company ParticipantsSolomon Moshkevich - President of Clinical DiagnosticsSteve Chapman - CEOCasey Woodring - Vice President of Equity ResearchSubbu Nambi - Managing Director and Healthcare Equity ResearchPuneet Souda - Senior Managing Director of Life Science Tools and DiagnosticsAlex Aleshin - General Manager of Oncology and Chief Medical OfficerMichael Brophy - CFOConference Call ParticipantsDoug Schenkel - Managing Director and S ...

Natera (NasdaqGS:NTRA) Q3 2025 Earnings Call November 06, 2025 04:30 PM ET Speaker2Welcome to Natera's 2025 Third Quarter Financial Results Conference call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will hold a question-and-answer session. To ask a question at that time, please press star followed by one on your touchstone phone. If anyone has difficulty hearing the conference, please press star zero for operator assistance. As a reminder, this con ...

Natera, Inc. Q3'2025 Earnings Presentation November 6, 2025 Safe harbor statement This presentation contains forward-looking statements under the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this presentation, including statements regarding our market opportunity, our anticipated products and launch schedules, our reimbursement coverage and our product costs, our commercial and strategic partnerships and potential acqu ...

Financial Data and Key Metrics Changes - The company generated $547 million in revenue, representing a 32% growth over Q2 of the previous year, and a 34% growth when excluding revenue true-ups [6][8] - Gross margin increased to 63.4% compared to approximately 59% in the same quarter last year, with consistent margins sequentially versus Q1 [7][14] - The revenue guidance for the year has been raised by $80 million, now expecting revenues in the range of $2.1 billion to $2.2 billion [8][56] Business Line Data and Key Metrics Changes - The company processed 189,000 oncology tests in the quarter, marking a growth of nearly 20,000 units compared to Q1, setting a new milestone [7][11] - Significant growth was noted in the Signatera product line, with new patient starts doubling the previous quarterly record [7][12] - Women's health products had their second-best volume quarter ever, despite seasonal trends [10] Market Data and Key Metrics Changes - The company is seeking Medicare reimbursement for additional tumor types, which could yield approximately $250 million to $300 million in annual revenue [13] - The company reported a record low in Days Sales Outstanding (DSOs) at 57 days, indicating improved cash collection efficiency [15] Company Strategy and Development Direction - The company is focused on expanding its product offerings, including the launch of Fetal Focus, a new NIPT for inherited conditions [9][26] - Investments are being made in artificial intelligence to enhance diagnostic capabilities and operational efficiency [25][46] - The company aims to maintain operating expenses while increasing revenue, indicating a strategy of scaling without proportional increases in costs [20][58] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory, citing strong data and increased adoption of products [6][8] - The company is positioned to leverage its existing infrastructure to expand its market presence and improve patient outcomes [75] - Management highlighted the importance of upcoming clinical trial readouts, which could significantly impact practice guidelines [66][68] Other Important Information - The company exited its legacy paternity business, which had previously contributed to volume numbers [10] - The PEDAL study published in a high-impact journal demonstrates the potential of donor-derived cfDNA in predicting kidney transplant outcomes [30][31] Q&A Session Summary Question: What drove the record Signatera volumes? - Management noted strong data presentations at ASCO and significant growth in new patient starts, indicating a broad adoption of the product across various tumor types [61][63] Question: What are the key upcoming clinical trials? - Management highlighted the INVIGOR-11 trial and several colorectal trials that could influence guidelines and practice [66][68] Question: How is the company addressing the competitive landscape in early cancer detection? - Management emphasized their in-house R&D capabilities and the alignment of their PROCEED trial with FDA protocols, aiming for a strong performance readout [79][80]

Financial Data and Key Metrics Changes - The company generated $547 million in revenue, representing a 32% growth year-over-year, and a 34% growth when excluding revenue true-ups [5][6] - Gross margin increased to 63.4% compared to approximately 59% in the same quarter last year [6][15] - The company raised its revenue guidance by $80 million, now expecting revenues in the range of $2.1 billion to $2.2 billion [7][58] Business Line Data and Key Metrics Changes - The company processed 189,000 oncology tests in the quarter, marking a sequential growth of 20,000 units, which is a new milestone [6][11] - Signatera saw record growth in both sequential growth and new patient starts, with new patient starts being double the previous quarterly record [6][12] - Women's health products had the second-best volume quarter ever, following a strong Q1 [10] Market Data and Key Metrics Changes - The company is seeking Medicare reimbursement for additional tumor types, which could represent an annual revenue opportunity of $250 million to $300 million [13] - The company reported a significant increase in cash collections, with days sales outstanding (DSOs) down to 57 days, a record low [16] Company Strategy and Development Direction - The company is focused on launching new products, including Fetal Focus, a new NIPT for inherited conditions, and expanding its oncology data pipeline [8][30] - Investments are being made in artificial intelligence to develop new diagnostic biomarkers and improve operational efficiencies [19][47] - The company aims to maintain operating expenses while increasing revenue, indicating a strategy of scaling without proportional increases in costs [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory, citing strong data and new patient starts as key drivers [6][12] - The company is committed to maintaining cash flow positivity while investing in growth opportunities [60] - Management highlighted the importance of upcoming clinical trial readouts and their potential impact on market positioning [70][81] Other Important Information - The company exited its legacy paternity business, which had historically contributed to volume numbers [10] - The PEDAL study published in a high-impact journal demonstrated the utility of donor-derived cfDNA in predicting long-term outcomes after kidney transplant rejection [30][31] Q&A Session Summary Question: What drove the record Signatera volumes? - Management noted strong data presentations at ASCO and significant growth in colorectal and breast cancer monitoring as key drivers, along with a record increase in new patient starts [62][63] Question: What are the important upcoming clinical trials? - Management highlighted the INVIGOR-11 trial and several colorectal trials that could influence guidelines and practice [66][70] Question: How is the company addressing the competitive landscape in early cancer detection? - Management emphasized their in-house R&D capabilities and the alignment of their PROCEED trial with FDA protocols as a strategic advantage [80][81]

Financial Performance - Natera's Q2 2025 revenue reached approximately $547 million, a 32% increase compared to approximately $413 million in Q2 2024[10] - The company processed approximately 853,000 total tests in Q2 2025, reflecting a 12% year-over-year growth from approximately 760,000 tests in Q2 2024[10] - Gross margin was approximately 63% in Q2 2025, up from approximately 59% in Q2 2024, and the company generated approximately $24 million in cash inflow[10] - Natera is increasing its 2025 revenue outlook by $80 million, projecting revenue between $202 billion and $21 billion, with a gross margin between 61% and 64%, and positive cash flow generation[10] Oncology Business - Oncology tests processed in Q2 2025 totaled approximately 189,000, a 51% increase compared to approximately 125,000 in Q2 2024[10] - Clinical oncology experienced growth of approximately 20,000 units over Q1 2025[10] - Signatera demonstrated rapid growth, with clinical test volumes increasing by approximately 20,000 units[15] Product Development and Clinical Trials - Natera launched Fetal Focus, a new NIPT for 5 genes, and reported positive data from the PEDAL clinical trial in organ health[10, 35] - The DARE trial showed that over 99% of 400+ patients who remained Signatera-negative had recurrence-free survival (RFS) with a median follow-up of 274 months[48] - Natera is investing over $150 million in breast cancer clinical trials[55] AI Initiatives - Natera launched AI-based foundation models to support biomarker development, molecular therapeutics, and clinical decision-making[10] - The company is targeting approximately $200 million in value through AI-driven efficiencies[68]