Guardant Health (GH) Q2 Revenue Up 31%

Key Points

• Revenue soared 31% year over year to $232.1 million in Q2 2025, beating analyst estimates by $20.6 million for Q2 2025.

• Non-GAAP earnings per share improved to ($0.44), beating expectations, with non-GAAP EPS of -0.44 versus an estimated -0.73 and GAAP revenue of $232.1 million versus an estimated $211.48 million.

• Full-year 2025 revenue guidance was raised to $915–$925 million, with continued strong momentum in Shield and core oncology products.

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Guardant Health (NASDAQ:GH), a precision oncology company specializing in advanced cancer diagnostics and screening, reported results for the second quarter of fiscal 2025 on July 30, 2025. The company delivered GAAP revenue of $232.1 million, which exceeded the analyst consensus estimate of $211.5 million. It also reported a Non-GAAP loss per share of ($0.44), ahead of expectations for a non-GAAP loss of ($0.73) per share. Both revenue (GAAP) and earnings (non-GAAP) came in ahead of expectations, marking another period of accelerated growth. The quarter was highlighted by strong test volume growth, a positive gross margin in its new Shield screening business, and upwardly revised financial guidance.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Focus Areas

Guardant Health delivers blood- and tissue-based cancer tests for therapy selection, disease monitoring, minimal residual disease (MRD) detection, and early screening. Its flagship products include the Guardant360 family of liquid and tissue biopsy tests, Guardant Reveal MRD test, and the Shield blood test for colorectal and multi-cancer screening.

The business focuses on five main areas: innovation in oncology diagnostics, obtaining regulatory approvals, expanding through strategic partnerships, growing in new geographic markets, and improving the reimbursement landscape for its products. Each area is key to success in a rapidly changing, highly regulated healthcare field, where making cancer care less invasive and more accurate is central.

Quarter Highlights: Financial and Strategic Achievements

Revenue growth in Q2 2025 accelerated to 31% year over year. The increase in revenue was driven by rapid customer adoption of the company's cancer tests and higher reimbursement rates. Oncology segment revenue rose 22% to $158.7 million, reflecting strong demand for Guardant360 liquid and tissue tests, along with Guardant Reveal for MRD. Test volumes hit nearly 64,000 in oncology, a 30% increase from the corresponding prior year period, supported by both greater adoption and new applications.

Shield, the company’s blood-based screening test for colorectal cancer, recorded $14.8 million in revenue for Q2 2025, up from zero a year earlier. Shield test volumes grew sharply to about 16,000, representing a nearly 78% increase from the immediately preceding quarter. New milestones included Shield's inclusion in the National Comprehensive Cancer Network’s guidelines for colorectal cancer screening and a Breakthrough Device Designation from the U.S. Food and Drug Administration (FDA). These regulatory advances are important for broader payer coverage and health system adoption.

The biopharma and data segment generated $56.0 million in revenue in Q2 2025, up 28% from the corresponding prior year period. Revenue from this segment benefited from a greater number of research collaborations and higher demand for the GuardantINFINITY product, which provides partner companies with detailed genomic data for drug development.

Across all segments, the company expanded its suite of test offerings. Eleven new Smart Liquid Biopsy applications launched for Guardant360, enhancing the ability of physicians to select proper cancer treatments. Additionally, the company hit a multi-year pricing goal ahead of schedule, with the average selling price for Guardant360 Tissue tests reaching approximately $2,000.

Margins, Expenses, and Key Business Drivers

Guardant Health increased its non-GAAP gross margin by six points year over year to 66%. That reflects better reimbursement, especially from Medicare for its tests, and cost reductions across both manufacturing and logistics. Both the Shield and Reveal tests achieved positive gross margins, with Shield's blended selling price rising due to newly granted government pricing status known as ADLT, increasing the Medicare price from $920 to $1,495 effective April 1, 2025.

Operating expenses (GAAP) increased to $257.3 million, up from $205.4 million last year. The higher spending focused on scaling the Shield screening business and expanding the sales team. Net losses narrowed marginally, as the company's investments in commercial expansion and new product launches remain substantial. Free cash flow was negative $65.9 million, but this was an improvement from negative $99.1 million in free cash flow for Q2 2024. Improved free cash flow was attributed primarily to timing differences in bonus payouts.

On the reimbursement front, the company continues to benefit from favorable changes. The Shield test received a government pricing status (ADLT) that increased reimbursement for Medicare patients, and Guardant360 Tissue's Medicare payment was also raised at the start of CY2025 from $3,140 to $3,500. These changes were key to the company’s positive non-GAAP gross margin improvements and support Shield’s ongoing rapid rollout.

Significant product innovation was a quarter highlight. The launch of new applications for Guardant360 improves both clinical utility and market differentiation. The Guardant Hereditary Cancer Testing suite and new immunohistochemistry assays further extend the addressable market by covering more patient needs in oncology.

The company has also continued to make progress on regulatory and market expansion fronts. Shield now features in updated U.S. guidelines and received FDA Breakthrough Device status, supporting future adoption for multi-cancer detection. Global research studies, such as the NCI Vanguard study for Shield Multi-Cancer Detection, are now underway. Service agreements with new and existing biopharmaceutical partners also support the ongoing build-out of the biopharma and data segment.

Outlook and What to Watch

Management raised its full-year 2025 guidance, reflecting the strong momentum seen in the period. Revenue is now expected to reach $915–$925 million for FY2025, up from earlier guidance of $880–$890 million. Projected revenue growth now stands at around 24–25% year over year. Oncology revenues are forecast to grow by approximately 20%, Oncology test volumes are expected to grow by over 27%. For the Shield screening product, revenue guidance was increased to $55–$60 million, and Shield test volumes are forecast between 68,000 and 73,000. The biopharma and data segment is now expected to grow in the mid-teens percent range, faster than previous estimates.

Gross margin targets also crept up, with a new range of 63–64% for non-GAAP margin. Operating expenses (Non-GAAP) are set to climb to $840–$850 million, mainly reflecting continued investments in Shield’s national rollout. Free cash flow burn is predicted at $225–$235 million, an improvement from the previous year’s free cash flow burn of $275 million. Management now expects the core business, excluding Shield, to reach free cash flow breakeven by Q4 2025.

Investors should keep an eye on Shield’s commercial ramp and adoption, progress in building out the sales force, and further guideline and regulatory milestones for its screening products. Other areas to watch include the pace of future reimbursement improvements, the volume growth across all test categories, and progress on international and partnership-driven projects.

GH does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has positions in and recommends Guardant Health. The Motley Fool has a disclosure policy.