Guardant Health, Inc. Q4 2025 earnings call

Good afternoon. Thank you for attending the Guardant Health Q4 2025 earnings call. My name is Cameron, and I'll be your moderator for today. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to your host, Eric Hershey, VP of Investor Relations. You may proceed.

Thank you. Earlier today, Guardant Health released financial results for the quarter and year ended December 31st, 2025. Joining me today from Guardant are Helmy Eltoukhy, Co-CEO, AmirAli Talasaz, Co-CEO, and Mike Bell, Chief Financial Officer. Before we begin, I'd like to remind you that during this call, management will make forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. This call will also include a discussion of non-GAAP financial measures, which are adjusted to exclude certain specified items. Additional information regarding material risks and uncertainties, as well as the non-GAAP financial reconciliation to most directly comparable GAAP financial measures, are available in the press release Guardant issued today, as well as in our 10-K and other filings with the SEC.

Guardant disclaims any intention or obligation to update or revise financial projections and forward-looking statements, whether because of new information, future events, or otherwise, except as required by law. The information in this conference call is accurate only as of the live broadcast. With that, I would like to turn the call over to Helmy.

Thanks, Eric. Good afternoon, and thank you for joining our Q4 and full year 2025 earnings call. Starting on slide three. 2025 was a breakout year for Guardant, where years of investment continues to fuel breakthrough innovation and best-in-class execution across our portfolio. In oncology, we introduced groundbreaking applications for Guardant360 Liquid, upgraded Guardant360 Tissue onto our Smart platform, and expanded Reveal to support therapy monitoring. In screening, we expanded Shield to include a multi-cancer detection result report. At the same time, we made significant progress driving adoption across the portfolio. We have seen exceptional growth in our oncology business, primarily due to the new capabilities and insights enabled by our Smart apps that are increasing both the breadth and depth of ordering of Guardant360 more than a decade after its launch.

In MRD, we received Medicare coverage for CRC surveillance in early 2025, and growing clinical data generation for Reveal positions us well for additional reimbursement coverage this year. 2025 represents the first full year for Shield IVD, where very meaningful volume and revenue generation exceeds our expectations. We have significantly expanded the commercial team and established impactful strategic partnerships to meet the growing demand for a high-performing, blood-based screening option. These advancements reflect our growing execution at scale as we deliver actionable insights to physicians and patients across the care continuum. Importantly, this execution has directly driven strong financial performance, both accelerating our top-line growth and strengthening our path to profitability. Now, I'd like to share a story that illustrates the real-world impact of our tests.

A 60-year-old man had gone his entire life without being screened for colorectal cancer, despite repeated recommendations from his physician each year to undergo a colonoscopy. Although he agreed to stool-based testing on several occasions, the kits were never completed once they arrived at his home. During a routine office visit, the patient was offered a Shield blood test, which he agreed to, and the test was completed that same day in the office. The Shield result was positive, which motivated the patient to undergo his very first colonoscopy, following his physician's recommendation. The colonoscopy identified stage 1 colon cancer, and the patient was quickly scheduled for surgery. Because the cancer was caught early, he has been informed that his treatment is likely curative.

The patient expressed deep gratitude for the accessibility and ease of use of the Shield blood-based test, which removed a long-standing barrier to screening and ultimately delivered a life-changing result. Turning to top-line performance on slide four, we delivered $281 million of revenue in the Q4, representing 39% year-over-year growth, and $982 million of revenue or 33% year-over-year growth for the full year. This exceptional performance reflects continued broad-based growth across our oncology screening and biopharma and data businesses. Taking a closer look at our oncology business in slide five, oncology revenue increased 30% to $190 million, and oncology volumes grew 38% to approximately 79,000 tests in the Q4. Turning to slide six, our Smart platform is driving a clear step change in oncology volumes.

Guardant360 continues to benefit from a consistent rollout of new Smart Platform applications, which drive deeper clinical adoption. Guardant360 Tissue gained traction following the major product upgrade released in the Q2 of 2025, and Reveal volumes have benefited from Medicare reimbursement for CRC surveillance in the Q1 of 2025. Together, these drivers will continue to catalyze very strong growth in our oncology business. Moving on to slide seven. With each patient tested, our data repository continues to deepen and diversify, bringing together rapidly growing Smart epigenetic profiles, multimodal longitudinal data sets, and an expanding set of earlier stage and asymptomatic patient data through Reveal and Shield. This growing data asset is becoming a durable moat. Each additional test compounds the breadth, quality, and uniqueness of our data set, which in turn strengthens the insights we can deliver.

By applying our Infinity AI learning engine to this expanding data treasury, we can accelerate therapeutic discovery and biomarker development to our biopharma partners while uncovering new biological insights that reinforce our clinical franchise. The result is a compounding flywheel that steadily increases the clinical utility of our portfolio and expands the impact of what we can deliver to physicians and their patients. We have already applied Infinity AI to develop 15 smart applications on Guardant360 Liquid, and we believe these applications meaningfully expand the clinical utility of Guardant360 Liquid, while further extending our leadership in the liquid CGP market. Looking more closely at some of the recent highlights within our oncology business in slide eight, all of our oncology products contributed meaningfully to our Q4, 38% year-over-year growth in volumes, with Guardant360 delivering remarkable volume growth of nearly 30% year-over-year.

Reveal continues to be our fastest-growing product, reflecting growing demand for tissue-free MRD. We are particularly encouraged by the early uptake of Reveal for late-stage therapeutic response monitoring, launched in the Q4, which is broadening its clinical use. We are advancing the clinical evidence supporting Reveal and recently submitted our chemo monitoring data package to MolDX for Medicare reimbursement and data from our CDK4/6 monitoring study for publication. We continued expanding global access in Q4 with the launch of a Guardant360 CDx technology with Policlinico Gemelli, a leading oncology center in Rome, Italy. With approximately 400,000 new malignant tumor cases diagnosed annually across Italy, we are excited to empower oncologists to make more informed treatment decisions for patients with solid tumor cancers. Turning to slide 9 to take a closer look at our Reveal data pipeline.

We continue to make strong progress in generating and publishing compelling data across multiple cancer types. Based on the Medicare coverage we gained for CRC surveillance, we have now submitted additional data packages to support coverage in breast cancer surveillance, immuno-oncology monitoring, and chemo monitoring. As I just mentioned, we also plan to submit the package for CDK4/6 inhibitor monitoring following the publication. We were encouraged to see data from the largest study of MRD in Stage III colon cancer published in the Journal of Clinical Oncology, which shows that detecting ctDNA with Reveal better predicts recurrence and overall survival than standard imaging. Looking ahead, we have ongoing studies across more than five additional tumor types in both the adjuvant and surveillance settings. Together, the growing body of evidence will continue to strengthen the clinical utility of Reveal and support broader adoption in MRD. Moving on to slide 10.

Building on our leadership in tissue-free MRD, we launched Guardant Reveal for therapy monitoring in the Q4, expanding the franchise into a significant new opportunity in late-stage cancer. Physicians can now use a simple blood test to gain a real-time molecular view of treatment response and detect disease progression earlier. While still early in the launch, we have been very encouraged by the initial traction we are seeing. We believe we are building a meaningful competitive moat in our oncology business through the combined strength of Guardant360 and Reveal. Guardant is uniquely positioned with scaled offerings spanning both treatment selection and monitoring, enabling a more comprehensive view of the patient journey. This differentiation is driving deeper clinical adoption, supporting more integrated ordering patterns, and creating a natural synergistic dynamic across the oncology franchise.

When used together, Guardant360 and Reveal enable a seamless approach to therapy selection, monitoring, and retreatment across the continuum of care. We are also excited about the potential for therapy monitoring with Guardant360, highlighted by the results from the AstraZeneca-sponsored SERENA-6 trial. This study demonstrated a progression-free survival benefit when late-stage breast cancer patients were switched to camizestrant following the detection of ESR1 mutations in blood. Upon companion diagnostic approval of Guardant360, we believe this practice-changing protocol could represent a meaningful driver of test volume. Together, these advances reflect the growing role of blood-based monitoring in cancer care. Shifting gears to our biopharma and data business in slide 11, we delivered another year of strong performance, with revenue growing 18% year-over-year to $210 million in 2025.

We are a leader in companion diagnostics, with 25 approvals to date across the U.S., Japan, and Europe, and a robust pipeline of ongoing CDx programs. In the last six months alone, we have announced five new CDx approvals for Guardant360, including the U.S. approval last month for the encorafenib combination therapy in patients with BRAF V600E mutant metastatic colorectal cancer, representing the first FDA approval for Guardant360 in CRC. Our biopharma partner base now includes more than 200 companies, and in January, we announced a multi-year agreement with Merck to develop companion diagnostics and commercialize novel therapies. This partnership reflects the growing role of our Smart platform across both liquid and tissue and drug development and the strategic value of our platform to biopharma customers. We also made significant progress expanding both the scale and utility of our data set through a series of high-impact partnerships.

These collaborations integrate comprehensive EMR records with genomic and epigenomic tumor profiling to accelerate cancer therapy, research, and development, advanced drug response prediction and biomarker insights using multimodal AI, and enable biopharma partners to access EHR and clinical genomic data to support more efficient clinical development of new cancer therapies. With that, I will now turn the call over to Amir Ali for an update on screening.

Thanks, Helmy. Moving on to slide 12. Shield has delivered extraordinary growth since launch. We delivered $35 million of Shield testing revenue in Q4, driven by approximately 38,000 tests, which was a meaningful step-up compared to 24,000 tests in Q3. Revenue growth has closely tracked volume growth, reflecting ADLT pricing, favorable collections, and a disciplined focus on reimbursable lives. Based on performance to date, we believe Shield is the most successful diagnostic launch in history outside of COVID testing, and it's positioned to be a significant multi-year growth driver for Guardant. Now, turning to slide 13 to take a closer look at screening highlights for the Q4 of 2025. Shield had strong sequential growth in Q4, driven by growing demand from both patients and physicians. Adherence rates remained high, reinforcing the accessibility and convenience of blood-based screening.

To support the growing demand, we continued to scale our commercial organization throughout 2025, exiting the year with approximately 300 sales reps. Last month, we received coverage from TRICARE for active duty service members and their families with no copay. TRICARE will cover Shield for all eligible average-risk individuals aged 45 and older. In Q4, we launched a dedicated health system team, and we are excited to report that we have successfully deployed our first enterprise-scale integrations with large health systems in West Virginia and Georgia. We are excited by the early progress demonstrating the market demand and our ability to operationalize Shield within complex health systems, including full EMR integration and workflow deployment. Beyond CRC, we are excited to expand Shield to include multi-cancer detection results reported in October.

Although it's still early days, we are encouraged with physicians' enthusiasm to get access to MCD findings and strong interest by patients to be part of the MCD data collection initiative. Turning to slide 14. We are very encouraged by Shield's real-world adherence, which reached 93% across the first 100,000 Shield tests ordered. In other words, when physicians order Shield for CRC screening, 93% of patients completed the test. This represents a meaningful improvement compared to other screening modalities, where adherence typically ranges from 25%-71%. As we illustrated in the patient story earlier, the ability to complete the Shield test during an office visit removes key barriers and enables far more patients to complete their CRC screening. Taking a closer look at our recent strategic collaborations to scale our commercial infrastructure on slide 15.

We are excited to announce collaborations with Quest Diagnostics and PathGroup, which will broaden our national reach in 2026. Our collaboration with Quest enables access to their national sales organization and allows providers to order Shield and receive results directly through the Quest Connectivity System, which was used by approximately 650,000 clinicians and hospital accounts last year. We remain on track to launch this collaboration later this quarter. The PathGroup cooperation went live in the Q4 and expands Shield's reach to more than 250 health systems across 25 states. We look forward to seeing the positive impact of our growing commercial infrastructure in 2026 and years to come. Moving on to slide 16. Our goal has always been to detect many cancer types early when they are most treatable.

With that in mind, we developed Shield as a multi-cancer detection platform. Turning to slide 17. In Q4, we expanded Shield to include a multi-cancer results report, which includes findings for nine of the most common cancers in addition to CRC. With each positive MCD finding, the report includes a cancer site of origin or CSO caller, which provides tumor-specific information, giving more clear guidance to physicians for subsequent diagnostic workup. The Shield MCD report is available to Shield CRC patients who opt in and authorize the release of their medical data to Guardant. As a result of this initiative, we expect our Shield data repository to grow exponentially, and we look forward to leveraging this high-quality data to support reimbursement and regulatory approvals, drive a deeper understanding of clinical utility, and support future technology improvements.

We are encouraged to see the recent passage of legislation establishing a Medicare coverage pathway for multi-cancer detection tests. While this is not expected to be a meaningful driver of our business in the near term, we view this as a positive step forward for the field. Turning to slide 18. Our outstanding commercial performance in 2025, reflected in rapidly growing revenue, was driven by several factors. We achieved ADLT status for Shield, securing a $1,495 reimbursement rate that supports healthy ASP and gross profit, enabling us to reinvest in commercial expansion. We also benefited from meaningful first-mover advantage and clear product market fit, which drove broad provider adoption. Our best-in-class commercial execution, continued progress with EMR integration, inclusion in NCCN guidelines, were additional key contributors to our growth trajectory in 2025.

We believe these foundational achievements position Shield for continued strong growth ahead. Looking more closely at our 2026 setup, the ADLT rate of $1,495 has now been incorporated into the clinical lab fee schedule and is secured through December 2027. We also expect to see benefits from our collaboration with PathGroup, alongside the continued expansion of our field force throughout the year. Additional growth drivers include ACS guideline inclusion, targeted direct-to-consumer campaign launches, and the expansion of self-pay Shield into select market outside the U.S. Turning to slide 19. We continue to invest aggressively in R&D to improve our product performance. As part of that process, we have rigorously evaluated dozens of external technologies over the years.

We recently completed the acquisition of MetaSyte Diagnostics, which brings a new technology in-house that is complementary to the Smart Platform and also brings on an impressive team, further strengthening our world-class R&D organization. We are excited for the technology's potential to enhance our CRC screening, multi-cancer detection, and ultimately, the entirety of our oncology product portfolio. It also has the potential to accelerate our multi-disease detection pipeline. With that, I will now turn the call over to Mike for more detail on our financials.

Thanks, AmirAli. Turning to slide 20, I'll review select financial highlights for the quarter and full year ending December 31, 2025. Unless otherwise noted, all growth rates are year-over-year. Total revenue in the Q4 increased 39% to $281.3 million, reflecting strong execution across oncology, biopharma and data, and screening. Oncology revenue increased 30% to $189.9 million, driven by continued strong volume growth. We reported approximately 79,000 oncology tests in Q4, up 38%, demonstrating sustained momentum across the portfolio. Guardant360 Liquid volumes increased nearly 30%, supported by expanding clinical utility from Smart apps launched over the past year, and Guardant360 Tissue remains strong following a major upgrade introduced in Q2.

Reveal continued to be our fastest-growing oncology product, benefiting from CRC surveillance reimbursement and ongoing strength in breast and lung cancer. We were also encouraged by the early uptake of Reveal for late-stage therapy response monitoring launched in Q4. Average selling prices were stable sequentially, with Guardant360 Liquid in the range of $3,000-$3,100, Guardant360 Tissue approximately $2,000, and Reveal between $600-$700. As a reminder, we've submitted data packages to MolDX for Medicare reimbursement, covering breast MRD and both immunotherapy and chemotherapy response monitoring. Successful outcomes will provide upside to Reveal ASP. Biopharma and data revenue was $54.0 million, up 9%, which was in line with our expectations. Screening revenue totaled $35.1 million from approximately 38,000 Shield tests.

Shield ASP was approximately $850, consistent with expectations and reflecting our focus on Medicare-covered patients. Out-of-period revenue totaled approximately $18 million for the Q4 of 2025, including approximately $3 million related to screening. This was in line with prior periods, compared to approximately $17 million in both the Q3 of 2025 and the Q4 of 2024. For the full year, total revenue grew 33% to $982.0 million. Oncology revenue increased 26% to $683.6 million. We reported approximately 276,000 oncology tests, representing 34% growth. Guardant360 volume growth accelerated to 25% for the year, driven by continued Smart app adoption.

Guardant360 Tissue volumes strengthened in the H2 following the Smart Platform upgrade, and Reveal remained our fastest-growing oncology product throughout the year. Biopharma and data revenue grew 18% to $210.1 million. Finally, screening revenue totaled $79.7 million in our first full calendar year since launch, generated from approximately 87,000 Shield tests. Turning to Slide 21. Non-GAAP gross margin improved to 66% in Q4, compared to 63% in the prior year. For the full year, non-GAAP gross margin increased to 66%, up from 62% in 2024. This improvement was primarily driven by a significant reduction in Reveal cost per test, which improved from over $1,000 in Q3 2024 to under $500 throughout 2025. We also made meaningful progress improving Shield gross margins.

Shield's non-GAAP gross margin improved from negative levels at launch to 52% in Q4 2025. This reflects strong ASPs under the Medicare ADLT rate, disciplined focus on reimbursable testing, and continued volume-driven cost reduction. Shield cost per test declined sequentially and exited the year at approximately $450, in line with our operational plan. Non-GAAP operating expenses were $260.0 million in Q4, up 21%, and $903.7 million for the full year, up 19%. Full-year operating expense was modestly above guidance due to two Q4 items. First, an increase in accrual for the 2025 company bonus plan, which reflects the strong performance in the year across financial, regulatory, and commercial milestones. Second, the continued reinvestment of incremental screening gross profit into sales and marketing to accelerate our commercial build-out.

Adjusted EBITDA loss improved to $64.9 million in Q4, compared to $78.4 million in the prior year quarter. For the full year, adjusted EBITDA loss improved to $220.9 million versus $257.5 million in 2024. Turning to slide 22. We continue to improve cash performance in 2025. Free cash flow burn was $233 million for the year, an improvement of $42 million and in line with our guidance. Importantly, excluding screening, the core business generated positive free cash flow in both Q3 and Q4. We expect the core business to be free cash flow positive for the full year 2026, and remain committed to achieving company-wide cash flow breakeven by the end of 2027.

As Amir already mentioned, in December, we acquired MetaSyte for $59 million in upfront cash, plus up to $90 million in contingent consideration tied to future commercial and regulatory milestones. We believe this technology enhances our existing product portfolio and accelerates our multi-disease detection pipeline. Following the MetaSyte acquisition and our November equity and convertible debt financing, we ended the year with approximately $1.3 billion in cash, providing sufficient runway to fund our growth initiatives and reach company-wide cash flow breakeven. Turning to slide 23. We enter 2026 with solid momentum across the business and increasing visibility into our growth drivers. For full year 2026, we expect revenue to be in the range of $1.25 billion-$1.28 billion, representing growth of 27%-30%.

This outlook reflects the same strength in oncology and accelerating expansion in screening, firmly positioning us to achieve our 2028 long-range revenue target of $2.2 billion. We expect oncology revenue growth of 25%-27% in 2026, supported by volume growth of approximately 30%. We believe demand fundamentals remain strong across the portfolio. Guardant360 Liquid should continue to benefit from adoption of Smart Apps, and Guardant360 Tissue growth should continue to build on the Smart Platform upgrade and continued strong commercial execution. Reveal is expected to remain our fastest-growing oncology product, driven by MRD and therapy monitoring. Note that our oncology guidance does not include potential upsides during the year from SERENA-6 ESR1 monitoring, FDA approval of Guardant360 Liquid CDx, and the launch of Reveal Ultra.

For biopharma and data, we're encouraged by recent strategic partnerships and the strength of our CDx pipeline. For 2026, we're forecasting low double-digit revenue growth, supported by both ongoing collaborations and new program starts. We expect screening revenue to be in the range of $162 million-$174 million, driven by 210,000-225,000 tests, a meaningful growth from approximately $80 million revenue and 87,000 tests in 2025. As in 2025, we expect sequential increase in Shield volumes every quarter, with the increases expected to be greater toward the back half of the year. This reflects early year seasonality at PCP offices, the ramping productivity of our growing number of sales reps, and the expansion of EMR capability through our Quest and PathGroup collaborations.

Note that our screening guidance does not include potential upside from Quest co-promotion activities as well as ACS guideline inclusion, which we continue to expect in the near future. We continue to make steady progress improving gross margins across our products through ASP optimization, workflow efficiencies, transition to NovaSeq X, and disciplined cost management. For 2026, we expect non-GAAP gross margins to be in the range of 64%-65%, reflecting ongoing operational improvements, volume growth, and expected product mix. We expect non-GAAP operating expenses of $1.03 billion-$1.05 billion, representing 14%-16% growth year over year. We anticipate continued operating leverage as revenue growth outpaces expense growth. R&D and G&A are expected again to remain relatively stable, with incremental investment primarily directed towards screening, sales, and marketing. Finally, we remain focused on reducing cash burn each year.

For 2026, we expect free cash flow burn of $185 million-$195 million, an improvement from 2025. Excluding screening, we expect the remainder of the business to be free cash flow positive for the full year. Finally, turning to slide 24. Looking ahead, we have a rich set of catalysts across our business that will drive continued growth. In oncology, we expect to launch several new products, including Guardant360 Liquid CDx for lung FDA approval, our ESR1 monitoring test, and Reveal Ultra. In addition, we expect to release additional apps driven by our Smart Platform and advance reimbursement across multiple indications for Reveal.

In biopharma and data, we expect new CDx approvals as well as additional strategic biopharma and Infinity AI data partnerships. In screening, we look forward to inclusion in ACS guidelines in the near future, driving commercial expansion with Quest and expanding self-pay Shield outside the U.S.. With that, we'll now open the call for questions.