Natera (NTRA) Q4 2025 Earnings Call Transcript

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Date

Feb. 26, 2026, 4:30 p.m. ET

Call participants

• Chief Executive Officer — Steven Leonard Chapman
• Chief Financial Officer — Michael B. Brophy
• President, Clinical Diagnostics — Solomon Moshkevich
• General Manager of Oncology, Chief Medical Officer — Alexey Aleshin
• President, Chief Business Officer — John Fesko

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Takeaways

• Test volume -- 924,000 total tests processed, including a record 225,000 MRD clinical units, with MRD units growing approximately 56% year over year.
• Revenue -- Revenue reached $666 million, about $6 million above January preannounce, representing roughly 40% year-over-year growth.
• Gross margin -- 66.9% gross margin reported, with 3% of this attributable to $60 million in revenue true-ups; organic gross margin posted at 63.7% after excluding true-ups.
• Cash flow -- Over $107 million in cash flow was generated in 2025 as the company continued to invest in growth initiatives.
• Days sales outstanding (DSOs) -- DSOs improved to 47 days compared to 68 days a year ago.
• 2026 guidance -- Projected revenue between $2.2 billion and $2.7 billion; gross margin guidance set at a 63%-65% range; plan to hold SG&A about flat, with targeted R&D investment.
• Signatera ASPs -- Signatera average selling price rose by $20 sequentially from the prior quarter, with guidance implying an additional $30 ASP growth in 2026.
• Product developments -- Launch of genome-version Signatera and Latitude MRD, as well as the 21-gene Fetal Focus NIPT; Latitude submitted to MolDX for reimbursement in CRC.
• Foresight Diagnostics acquisition -- Addition of phased variant technology enables detection below one fragment per 10,000,000 normal copies, with immediate integration into Signatera, already available for research use.
• Women's health data -- Fetal Focus test demonstrated 96% sensitivity and 98% specificity; its EXPAND trial received oral plenary recognition at the Society for Maternal-Fetal Medicine.
• Organ health -- Prospera expanded with validation data in both heart and lung transplants, including reduced biopsy interventions; ACEs EMB heart trial completed enrollment, with data readout expected mid-2027.
• Oncology clinical progress -- Head and neck cancer SYNERGY trial showed 74% of patients de-escalating chemotherapy with a 63% objective response rate and 48% rate of grade 3 or higher toxicity.
• Insurance and reimbursement -- Broader Medicare reimbursement submission for Signatera could increase covered indications, with 30%-35% of Signatera tests still in non-covered buckets.
• Operational leverage -- Operating losses narrowed in Q4, with net income aided by a deferred tax item related to the Foresight acquisition; operating expenses expected to grow 9.5% in 2026, below the 25% midpoint revenue guide.
• Balance sheet -- Over $1 billion in cash and securities on hand at year-end.

Summary

Natera (NASDAQ:NTRA) emphasized broad-based operational momentum, with diagnostic volumes reaching all-time highs and new product launches catalyzing expansion in both oncology and women's health. Management identified integration of phased variant technology and tissue-free MRD (Latitude) as key differentiators, noting immediate implementation and ongoing clinical reimbursement efforts for major indications. Clinical evidence generation, particularly in head and neck cancer and transplant monitoring, is poised to open additional market opportunities and support anticipated insurance access gains. The company presented targeted guidance for profit expansion in 2026, balancing ambitious revenue growth with stable SG&A and increasing returns from R&D, underpinned by robust cash reserves and declining DSOs.

• Chapman said, "more than 50% of oncologists in the United States ordered a Signatera test in the quarter," underscoring substantial adoption across cancer care settings.
• Fesko highlighted, "Latitude MRD positivity was highly prognostic for recurrence, with a hazard ratio of 10 post-surgery, a hazard ratio of 31.9 in post-treatment surveillance, 84% longitudinal sensitivity, 97% sample-level specificity, and a 4.6-month median lead time ahead of imaging."
• Moshkevich noted, "Based on low-risk Prospera results, clinicians elected to forego the nine-month surveillance biopsy in about 75% of patients," demonstrating clinical impact in reducing invasive procedures.
• Operating margin improvements were attributed in part to a "high-margin contribution from pharma in Q4" and lower costs of goods sold during the period, with Brophy cautioning that "drivers of the Q4 improvement may not repeat every quarter."

Industry glossary

• MRD (Minimal Residual Disease): Molecular measurement of small amounts of cancer cells that remain in a patient during or after treatment, guiding decisions in oncology.
• ctDNA: Circulating tumor DNA detectable in blood, used in diagnostic and treatment-monitoring assays.
• Phased variant technology: Approach for MRD detection by tracking multiple mutations on the same DNA fragment, enhancing sensitivity and reducing error rates.
• ASP (Average Selling Price): The typical price realized per diagnostic test sold, excluding adjustments or extraordinary items.
• True-up: Retrospective revenue adjustment resulting from revised payment collection expectations based on subsequent payor reconciliations.
• MolDX: A program administered by Medicare contractors for review and coverage determination of advanced molecular diagnostic tests.
• ADLT (Advanced Diagnostic Laboratory Test): CMS designation for certain unique molecular diagnostic assays enabling specific reimbursement mechanisms.
• DSOs (Days Sales Outstanding): Average number of days taken to collect payment after a sale is made, reflecting operational efficiency in revenue collection.
• SMFM (Society for Maternal-Fetal Medicine): Leading medical society in maternal-fetal medicine; plenary presentation indicates high scientific relevance.
• Exome/Genome/Latitude MRD: Distinct tumor-informed (Exome, Genome) and tumor-naive (Latitude) versions of Natera's MRD testing platforms.

Full Conference Call Transcript

Michael B. Brophy: Thanks, Operator. Good afternoon. Thank you for joining our conference call to discuss the results of our 2025. On the line, I am joined by Steven Leonard Chapman, our CEO, Solomon Moshkevich, President, Clinical Diagnostics, Alexey Aleshin, General Manager of Oncology, and our Chief Medical Officer, and John Fesko, President, Chief Business Officer. Today's conference call is being broadcast live via webcast. We will be referring to a slide presentation that has been posted to investors.natera.com. A replay of the call will also be posted to our IR site as soon as it is available.

Starting on slide two, during the course of this conference call, we will be making forward-looking statements regarding future events and our anticipated future performance, such as our operational and financial outlook and projections, our assumptions for that outlook, market size, partnerships, clinical studies and expected results, opportunities and strategies, and expectations for various current and future products, including product capabilities, expected release dates, reimbursement coverage, and related effects on our financial and operating results. We caution you that such statements reflect our best judgment based on factors currently known to us and that events or results could differ materially.

Please refer to the documents we file from time to time with the SEC, including our most recent Form 10-K or 10-Q and the Form 8-K filed with today's press release. Those documents identify important risks and other factors that may cause our actual results to differ materially from those contained in or suggested by the forward-looking statements. Forward-looking statements made during the call are being made as of today, 02/26/2026. If this call is replayed or reviewed after today, the information presented during the call may not contain current or accurate information. Natera, Inc. disclaims any obligation to update or revise any forward-looking statements.

We will provide guidance on today's call, but will not provide any further guidance or updates on our performance during the quarter unless we do so in a public forum. We will quote a number of numeric or growth changes as we discuss our financial performance. Unless otherwise noted, each such reference represents a year-on-year comparison. And now I would like to turn the call over to Steve. Steve?

Steven Leonard Chapman: Great. Thanks, Mike. Let's get to the highlights on the next slide. We had a fantastic quarter. We processed about 924,000 tests and set another record for MRD clinical unit growth with 225,000 tests processed in Q4. MRD clinical units grew about 56% compared to 2024. We generated roughly $666 million in revenue in the quarter, which is about $6 million ahead of our preannounce in January, and represents approximately 40% revenue growth over Q4 2024. We are very pleased to generate gross margin of 66.9% in the quarter, which was not part of our preannounce and was well ahead of our expectations.

All of that progress led us to generate over $107 million in cash flow in 2025, even as we doubled down on growth investments throughout the course of the year. We are off to a great start so far in 2026, and we are excited to initiate our guide for the year. We expect to generate between $2.2 billion and $2.7 billion in revenues, gross margins between 63% and 65%, holding SG&A stable while we make targeted investments in R&D with the expectation that we generate another strong cash flow year in 2026. Mike will spend a lot more time on this topic later in the call.

We have had a lot of exciting news since the JPM conference including publishing the outstanding performance of our Latitude tissue-free MRD test, which has now been submitted to MolDX, and launching the 21-gene fetal-focused single-gene NIPT test. Data on Fetal Focus was just awarded an oral plenary presentation at the Society of Maternal-Fetal Medicine, the only single-gene NIPT to earn that honor. It is worth reflecting for a moment on the progress we made in 2025. We had a transformative year financially, with 40% quarter-over-quarter revenue growth and significant gross margin expansion, while at the same time continuing to invest in our future.

In a few years, when we look back on it, I think the key investments we made in our commercial channels, product launches, and clinical studies will prove to be engines for continued growth. You can see here on the page just a few of the product highlights. We significantly expanded our MRD product portfolio by launching the genome version of Signatera and the Latitude MRD test, both of which complement Signatera beautifully. We delivered the strongest year yet for Signatera data generation highlighted by the IMvigor011 publication in the New England Journal.

Then at the end of the year, we welcomed Foresight Diagnostics to the fold, which gives us the phased variant technology, unlocks the next level of ultra sensitivity, and is already paying dividends as we will discuss today. We also advanced organ health and women's health, with significant investments in products like Fetal Focus, and key studies like the randomized ACEs EMB trial in organ transplant. Okay. Let's get into some of the business trends on the next slide. I want to jump straight to MRD clinical unit volume. Q4 represented yet another record growth quarter.

Based on our internal data, we estimate that more than 50% of oncologists in the United States ordered a Signatera test in the quarter which just shows you the extent to which MRD is rapidly becoming a part of the standard of care for many cancer patients. Physicians continue to show a desire to adopt MRD broadly in their practice, which plays to our strengths given the breadth and quality of our data. We are off to a great start so far in Q1. The next slide shows revenues, which was another area of significant outperformance this quarter.

As I mentioned, we came in about $6 million ahead of the preannounce, on very strong overall volume growth and another quarter of sequential improvement in ASPs. We had an excellent oncology quarter and continued to see strength in women's health and organ health. $1,225 in Q4. We had about $60 million in true-ups this quarter consistent with our preannounced as cash collections continue to accelerate, and we posted another record for DSOs at 47 days, compared to 68 days just in 2024. The next slide shows our gross margin traction over time. And we had excellent margin execution in Q4.

Top-line gross margins were a record, as I mentioned, at 66.9% and we had about 3% of that as benefit from the revenue true-ups. Stripping out the true-ups, we posted a record organic gross margin quarter at 63.7%. Along with strong ASPs, we had a very lean COGS quarter in Q4, which drove significant organic step-up of 240 basis points just compared to the third quarter. Looking into 2026 and beyond, we have got a strong set of margin expansion opportunities. We think the cash collection trend continues to bode well for ASPs into 2026. To further improve ASPs, we have submitted for much broader Medicare reimbursement for Signatera.

As a reminder, a portion of the tests that we perform today are in indications that are not yet covered by Medicare, but where we submitted for coverage. We have a good track record of getting coverage given the quality of our data, so this could be an opportunity. We are also starting to see commercial payers come on given the breadth of progress that has been made on the biomarker state. In addition, we are increasingly seeing opportunities to deploy AI-enabled workflows to help ensure that we get reimbursed for covered services. Mike will spend a little more time on this in his section.

We have several COGS opportunities underway, as well, that will hit throughout the year, including both lab workflow opportunities and also deployment of AI to reduce many routine manual steps. All in, we are in a good position for margin expansion going forward. Okay. With that, let me turn it over to Solomon to discuss more details. Solomon?

Solomon Moshkevich: Thanks, Steve. Getting into some of our recent data and announcements, I want to begin in our women's health business with Fetal Focus, our next-generation single-gene NIPT. This test, powered by Natera, Inc.'s ultrasensitive linked SNP technology, directly analyzes fetal cell-free DNA to screen for serious inherited conditions. It addresses a significant clinical unmet need by enabling fetal risk assessment when the mother is a carrier of a recessive mutation but the father is unavailable for screening, a common real-world challenge in prenatal care.

Our expanded 21-gene offering announced in early January is the broadest single-gene NIPT product in the market with impressive flexibility, as it can either be ordered upfront along with the Horizon carrier screen or it can be ordered later after Horizon carrier status has already been reported. The test performance is robust, overall sensitivity across conditions of 96% and overall population-weighted specificity of 98%. The competitive strength of this product offering is fueling meaningful growth in new OBGYN and MFM accounts. Of course, the major source of strength for Fetal Focus is its prospective blinded validation in the EXPAND trial with confirmed genetic outcomes on all positives and negatives.

The EXPAND trial was selected for an oral plenary presentation earlier this month at the Society for Maternal-Fetal Medicine annual meeting. Scoring an oral plenary at SMFM is extremely rare, even in the age of cell-free DNA, so it is a strong indicator of the scientific and clinical relevance of this work. We are pleased with the feedback during and after the conference, and we look forward to submitting these results for publication in a leading peer-reviewed journal. We also look forward to significant new product enhancements in 2026 for our women's health customers to be announced in the future. Moving to the Organ Health portfolio now.

We continue to invest meaningfully in improving the clinical utility of Prospera donor DNA monitoring across all organ types. In addition to the early detection and treatment of graft injury, our vision is that Prospera can also help reduce unnecessary biopsies and unnecessary immunosuppression. In the field of heart transplant, we recently completed enrollment in the novel ACEs EMB trial, the first randomized controlled study directly comparing surveillance with Prospera against protocol endomyocardial biopsies. Protocol EMB, which often occur monthly or even more in year one post-transplant, is currently the standard of care for the approximately 4,500 patients per year in the U.S. who receive heart transplants.

So the goal of the trial is to show that patients can safely avoid most of those protocol biopsies. ACEs EMB has enrolled over 300 patients across 17 transplant centers in the U.S., randomizing participants one month after transplant to surveillance either with Prospera or with EMB in a two-to-one ratio, with clinical follow-up for 12 months. We look forward to reading out the results in mid 2027 once all follow-up data has been collected and analyzed. Complementing this approach now on the lung side, new data recently published in the journal Transplantation Direct highlights how Prospera-guided monitoring can reduce unnecessary surveillance biopsies for lung transplant recipients.

Lung transplant patients are typically monitored with transbronchial biopsies, usually five times or more in the first year after transplantation. These procedures are invasive, risky, and associated with significant potential morbidity. In this study, The Ohio State University Wexner Medical Center performed a prospective study incorporating Prospera monitoring into routine care. Based on low-risk Prospera results, clinicians elected to forego the nine-month surveillance biopsy in about 75% of patients. Over the ensuing three months, those patients experienced no significant differences in acute rejection rates, lung function metrics, or immunologic markers compared with patients who did undergo the biopsy.

This is an important validation of the biopsy-reduction concept in lung transplant, and we already see it driving engagement among clinical leaders in thoracic transplantation. Strong clinical data like this has continued to fuel meaningful share gains for Prospera in thoracic as well as renal transplantation. And with that, I want to turn it over to Alex to discuss our most recent data in oncology. Alex?

Alexey Aleshin: Thanks, Solomon. Here, we are highlighting what we view as exceptional momentum in bladder cancer going into the ASCO GU conference. As a single meeting alone, we have a strong set of abstracts and oral presentations that collectively reinforce the critical role of Signatera across the bladder cancer continuum, from risk stratification to treatment selection to enabling new care pathways like bladder preservation. A key theme here is, can we spare the bladder? Which we think is one of the most important clinical questions in the field.

Studies such as INBLADE and RETAIN show that ctDNA-negative patients who underwent active surveillance had similar outcomes to ctDNA-negative patients who had a cystectomy, suggesting that Signatera can identify candidates for bladder-sparing approaches, potentially avoiding or delaying radical surgery in appropriate patients. And finally, data sets like Niagara point to the next frontier, combining ctDNA and urinary tumor DNA to provide complementary insights into residual disease risk and local disease biology, a direction we believe can further strengthen patient selection for bladder preservation strategies and expand market size across urologic malignancies.

The takeaway is ASCO GU is one conference, but it is a great example of the consistent drumbeat we are driving, using high-impact data to expand Signatera into new indications, and to deepen penetration across existing workflows. And importantly, we are executing this playbook across multiple histologies. Moving to the next slide. We are highlighting exciting interventional data in head and neck cancer from the phase 2 SYNERGY trial in frontline recurrent or metastatic head and neck squamous cell carcinoma. What makes SYNERGY especially important is that it is not just showing ctDNA is prognostic. It demonstrates the benefit of ctDNA-guided treatment and adaptation in real time. Here is the clinical problem SYNERGY addresses.

In advanced head and neck cancer, physicians face a difficult sequencing decision. Start with immunotherapy alone, and risk undertreating patients who need rapid cytoreduction, or start with immunotherapy plus chemotherapy and risk overtreating patients who may not need prolonged chemotherapy exposure. The question is whether we can achieve the best of both worlds using Signatera-guided adaptive treatment approaches. In the study, patients started on either pembrolizumab alone or pembrolizumab plus chemotherapy, and then Signatera ctDNA dynamics were used to escalate or de-escalate chemotherapy in real time. The first important result is that 74% of patients de-escalated the chemotherapy at least once, with a median of two chemotherapy cycles delivered versus the typical six cycles.

This is a meaningful reduction in chemotherapy, and the question is how that affected patient outcomes. Amazingly, the outcome showed an objective response rate of 63%, which is really strong, compared to the 19% to 36% seen in the original registrational trial. And importantly, the rate of grade 3 or higher toxicity was only 48%, which is a clear improvement over historical precedents. The punch line is that SYNERGY supports a future where Signatera becomes a treatment navigation tool in the metastatic setting in head and neck cancer, and across other cancer types, helping physicians and patients optimize their therapeutic strategy in real time.

Furthermore, this head and neck indication is already covered by MolDX under our IO treatment response monitoring indication. We expect multiple similar studies to read out over the next few years, a testament to our investment into prospective clinical evidence generation that started many years ago. With this, let me turn it over to John to discuss progress on our MolDX submission and our phased variant technology. John?

John Fesko: Thanks, Alex. I am excited to announce that Natera, Inc. has submitted our first tissue-free MRD assay to MolDX in colorectal cancer. Latitude is a methylation-based assay that delivers MRD insight without needing tumor tissue, making it a strong complement to our flagship Signatera platform, enabling MRD assessment even when tissue is unavailable, insufficient, or delayed. In January, we published clinical validation from the GALAXY study in NPJ Precision Oncology. In a large dataset spanning 195 patients, and 1,230 time points, Latitude MRD positivity was highly prognostic for recurrence, with a hazard ratio of 10 post-surgery, a hazard ratio of 31.9 in post-treatment surveillance, 84% longitudinal sensitivity, 97% sample-level specificity, and a 4.6-month median lead time ahead of imaging.

When you look across published tissue-free MRD assays in CRC, we think these performance metrics are excellent. Importantly, the data also support clinical actionability and include a predictive signal for adjuvant chemotherapy benefit. Our recently submitted technical assessment is a key step towards broader reimbursement and scaled adoption in CRC, and another driver of MRD growth as we expand access and streamline ordering. We also look forward to validating this tissue-free technology for other cancer types later this year. Beyond Latitude, Natera, Inc. also has a full suite of Signatera submissions now under review by MolDX in a broad range of histologies, and we are excited to further expand insurance coverage for cancer patients.

Moving on, I also want to describe an exciting new technology that we have integrated into our tumor-informed Signatera platform, phased variants, that is driving our detection thresholds down to unprecedented levels, below one fragment of tumor DNA in a background of 10,000,000 normal copies. As a reminder, Natera, Inc. closed the acquisition of Foresight Diagnostics in December, and immediately integrated phased variants into our Signatera platform, where we expect it to enhance performance in MRD across solid tumors. This product is available today for research use and will be launched clinically this year. So what are phased variants, and why do they matter? Tumor-informed MRD testing has traditionally focused on identifying ctDNA with single tumor-derived variants.

Phased variants takes this concept further. Instead of looking for a single mutation on a fragment of ctDNA, we look for two or more mutations on the same physical DNA fragment. What makes phased variants powerful is not simply tracking more mutations, but rather how this approach fundamentally reduces the impact of background errors and enables vastly better sensitivity. Background errors that are routinely introduced through sequencing chemistry, artifacts, and biology can become an issue at very low tumor fractions. But with phased variants, the probability that such errors identically replicate variants on a single fragment is so low as to be almost zero.

So that dramatic reduction in error is what enables confident detection at thresholds 10 to 100 times lower than conventional approaches. Analytically, this translates into an LOD95 of approximately three parts per 10,000,000 and detection below one part per 10,000,000. And this technology is backed by very strong patents. Clinically, we believe this further widens our moat in MRD test performance. It is also a fantastic addition to our pharma services offering, generating significant excitement with partners. In fact, we have already signed an important prospective pivotal trial which we will be announcing when it kicks off. With this, let me turn it over to Mike to review the financials. Mike?

Michael B. Brophy: Great. Thanks, John. The next page is just a summary of the financials compared to last year. You can see what an impactful year 2025 was in terms of revenue scaling and gross margin improvement. Steve noted that we put a very strong gross margin here in Q4. And while the core ASP and COGS trends do look very strong, I think you also benefited from a few tailwinds specific to the quarter. For example, we had a nice high-margin contribution from pharma in Q4, and our reported units ratio to tests accessioned in the lab was a little higher than usual.

That tends to help gross margins because we only book revenues on the tests that have been fully reported out. I would also note that we significantly narrowed our operating losses in Q4 as compared to last year, even as we significantly stepped up our investments in OpEx. We actually generated net income in Q4, although that was helped along by a one-timer. It was a below-the-line deferred tax item related to the Foresight acquisition. We think our path to profitability remains very clear, and we are sticking to the plan we have laid out in the past.

We fully intend to keep our foot on the gas in terms of investing in the business as we grow our way to profitability. Finally, on this slide, you will just note that our balance sheet remains pristine with over $1 billion in cash and securities. Okay. Let's get to the guide on the next slide. Steve previewed the key pieces on revenues and gross margins, and we are well positioned to generate cash again this year. I will just remind you that consistent with prior years, this guide does not presume any meaningful contribution from revenue true-ups.

We will likely have some true-up benefit in 2026, but I expect true-ups as a percent of revenue to decline as we continue to wring out the towel on all of the operational improvements we have launched in revenue cycle management over the last few years. Beyond that, it is important for you to think about our underlying trends and unit economics, and I think guiding with future true-ups stripped out of the forecast makes it easier to understand and model the business. That is important context for evaluating year-on-year trends. For example, our gross margin for 2025 ex-true-ups was about 61.5%.

So centering the guide at 64% for this year represents our expectation that we continue to ring the bell on COGS improvement and additional ASP gains. I would also note that we are exhibiting some caution on this initial gross margin guide given, one, some of the drivers of the Q4 improvement may not repeat every quarter, and two, we have got some products launching that are not yet reimbursed as John mentioned. But when I reflect on the coverage roadmap that John described, I can certainly see a path to margin outperformance this year. Okay. On the next slide, this slide gives you that same bridge for revenues.

Backing out the 2025 true-ups, you can see that the midpoint of the guide implies roughly 25% growth over what was a monster year for us in 2025. The revenue guide presumes continued growth in women's health volumes and ASPs and another strong year of growth in the organ health products. On Signatera, Steve called out that we are already off to a really strong start so far in 2026. The guide calls for another excellent year on volume growth, which we are poised to deliver on. On the Q3 call, I noted that we expect another net $50 bump to ASP for Signatera over the near future.

Even though we are up roughly $20 in ASP for Signatera just in Q4, the guide implies another $30 or so in ASP growth embedded in this initial guide. Of course, that does leave us some upside room as the guys discussed potential for much broader reimbursement that is not embedded in guide just to start the year, along with our kind of standard operational improvements that we expect to get. Just a note on the overall pacing of the quarters. We expect Signatera and Prospera to grow sequentially quarter over quarter this year.

And for women's health, I think it is worth baking in the usual seasonality that we see, where Q1 is a big volume quarter, Q2 is down sequentially, and we recover to Q1 levels in Q3 and Q4. Okay. The next slide here is to give you some insight on the OpEx guide for the year. Overall, at the midpoint, we are slated to grow OpEx about 9.5%, just a bit better than what we previewed on the Q3 call and well below the roughly 25% pro forma growth implied by the revenue guide. The components of the OpEx give some important insight on where we are as a company.

After making the investments to get to the right-size commercial channels, particularly in oncology, we are now in a place where we can drive substantial top-line growth while holding SG&A roughly stable in 2026. Our plan is to stay focused on 2030 and beyond by continuing to invest in best-in-class products and clinical trials. The major components of the growth in R&D include a substantial investment in the FIND trial for early cancer detection in colorectal cancer, and the investments we are making in large clinical trials and technology development focused on MRD. I will just reiterate once more that we are going to stay in growth mode.

If important new opportunities arise this year, we are not going to be shy about adding some short-term operating expenses to yield long-term results. And now let me turn it back over to Steve.

Steven Leonard Chapman: Thanks, Mike. In summary, we had a great year across the business. And as you can see on the slide, we have several exciting milestones anticipated as we move through 2026. Okay. And with that, let me open it up to questions. Operator?

Operator: Thank you. If you would like to ask a question, your first question comes from the line of Catherine Schulte with Baird. Please go ahead.

Catherine Schulte: Hey, guys. Thanks for the questions. Maybe first, just on Signatera ASPs. On the Medicare side, a few moving pieces there with the ADLT surveillance coming down, but the adjuvant bundle rates going up. Can you just talk through the net ASP impact from those changes and how that factors into your kind of plus $30 annual guide?

Steven Leonard Chapman: Yeah. Thanks, Catherine. Mike, do you want to take that?

Michael B. Brophy: Yeah. Sure. Hey. Thanks, Catherine, for the question. Yeah. So the changes on the ADLT rate and on the bundle roughly net each other out given kind of the mix that we have had in terms of recurrence and bundles over the past year, so the net $30, what that really embeds in the guide is us just continuing to execute on broadening the percentage of time we are reimbursed for covered services for Medicare Advantage volumes, and more progress in the biomarker states. It leaves as upside the additional coverage and all the efforts that we have ongoing with MolDX that John Fesko was talking about on the call.

So as I mentioned, I mean, I think the strategy with these initial guides for us over the last ten, eleven years has been to just start with a demanding but achievable kind of initial guide for the year. And that is kind of how I would characterize this ASP guide.

Catherine Schulte: Okay. And then can you give us an update on Signatera mix by indication? If you were to receive a pan-cancer indication on solid tumors from MolDX, I guess, what would that mean for ASPs?

Solomon Moshkevich: Yeah. I will take that. So, yeah, I think we have kind of said before, you know, obviously, CRC, breast, bladder, you know, lung, some of the bigger ones there that we are already covered for making up the majority. But you know, there is a good 30%, maybe 35%, something in that range that fall into kind of the non-covered bucket. You know, that is kind of where we said, you know, if we can get coverage for the remaining Medicare indications, it could be, you know, based on the run rate, a couple hundred million dollars in gross profit and revenue.

And we submitted now for, you know, significant number of additional indications that would, I think, capture the vast majority of, you know, the remaining outstanding histologies. And, you know, we have a good track record of getting Medicare coverage just given the significant amount of data that we generated. So, you know, hopefully, that remains as upside on ASP, as Mike said.

Operator: Your next question comes from the line of Puneet Souda with Leerink Partners. Please go ahead.

Puneet Souda: Yeah. Hi, guys. Thanks for taking my question. And first one, maybe just given the strong growth in Signatera that you are seeing here, despite the seasonality, despite the holidays, you put up a very strong number. Last year, you are talking about sequential 8,000 to 10,000 increases. Mike, maybe for you, how should we think about that number, sequential increase number, this year? On the Data Catalyst side, maybe could you remind us what is most, you know, sort of needle moving this year in terms of the data? And any thoughts on NCCN? And just have a follow-up on prenatal.

Steven Leonard Chapman: And so maybe, let me comment just for a second on, you know, some of the data and then maybe, Mike, you can kind of talk about the pacing. And I do not know, Alex or Solomon, if you guys want to comment on the data. But what we have been focusing on is really generating a lot of evidence, you know, in a broader set of indications. And, you know, I think you are starting to see a lot of that come out. So we just had this, you know, interventional trial in head and neck cancer, which we think is a great indication. I think there is about 70,000 patients per year there.

I think last year, kind of the tail end of the year, we had a gastroesophageal study come out that was pretty significant. We had a pancreatic study come out that was pretty significant. So, you know, we are now generating the type of data in these other indications that, you know, we think can really move the needle. And I think that is exciting. So, Alex or Solomon, do you guys have any other studies that you want to call out specifically before, you know, before we talk about the pacing?

Solomon Moshkevich: I think that is a pretty good summary. I think, Puneet, if you just look at ASCO GU this year, I was actually at the conference earlier today, you know, ton of excitement. Probably three or four pretty practice-changing studies that, you know, we were commented on during the preread. I would say pretty much at every other conference later this year, probably five or six major ones, you probably will expect to see a similar drumbeat of clinical readouts. So we are expecting data in breast, additional GI indications, IO monitoring. And then, you know, some of the larger prospective randomized studies should start reading out in the next year or two.

As we get closer to that, we will provide some additional guidance.

Michael B. Brophy: And then just on the pacing. I mean, I am kind of in the same place as I have been in terms of the approach. I think the right way to model the growth of the Signatera units, I just would take the trailing four quarters, you know, average for the sequential growth units. That was, you know, '24, I think, last quarter. And now I think if you do the math including the Q4 number, I think it gets you to, you know, something like 20,000 units. I think that is a decent bar for evaluating Q1.

And then as you, you know, continue to grow, the reason why I like that approach is that it does update itself, and it kind of gives effect to the compounding effect that we have in the business given that it is repeat, you know, volumes per patient. And so I think that base expectation will just kind of continue to grow. Doing the last four quarters' average just kind of smooths out any of the random observations you will have quarter to quarter in terms of number of days or weather or holidays or what have you.

So I think that is the right approach, and, you know, it keeps getting higher, and the business just keeps on performing better and better.

Puneet Souda: Okay. That is super. And then a quick follow-up on the Fetal Focus product. I just want to understand your marketing approach today and your ability to take share in the market with an existing assay that is more often a single assay. You have two assays here, so maybe just, you know, walk us through the patient workup conversation, marketing of this assay, and how do you think, you know, how do you think about share gain in this, and how should we think about the growth in overall women's health from that share gain this year?

Steven Leonard Chapman: Thank you. Yeah. I will take that. I mean, I think, you know, the real question is, you know, really do physicians like the product? And, you know, from what we are seeing is there is significant interest in the Fetal Focus test. I think we are hitting all the right marks. I mean, we are seeing the volume really increase, and I think we are in a position to see that continue throughout the year. So from a marketing standpoint, our test works in a very similar way to other single-gene tests on the market, from the standpoint of how it is ordered or what the flexibility is when, you know, when you order.

So you can decide either to order the test upfront. You know, basically, if the mother is positive, then the Fetal Focus test will be run. And I think that is kind of comparable to, you know, how others do it. You know, you have to sort of know the mother is positive before you can run the fetal test. And then I think separately, although I do not know exactly how others do it, the other option is you can, you know, order the test, send the blood, and then wait and see if the mother is positive, and then we can sort of reflex to it. So, you know, there are different approaches.

But we offer all the different approaches. And, you know, I think we are flexible from the standpoint of how people want to access the test. But we are seeing a lot of uptick. If you look at the SMFM plenary presentation, you know, certainly, you know, that is a prestigious selection, one that we are excited about. And I think that speaks to the strength of the data.

Operator: Your next question comes from the line of Daniel Gregory Brennan with TD Cowen. Please go ahead.

Daniel Gregory Brennan: Great. Thank you. Thanks for the questions. Maybe just on, you know, kind of staying on Signatera. Can you just give a little color as we exited 2025? I know there is a question on pan-cancer, but just walk us through kind of tumor types, kind of what you are seeing as the key drivers. And as we look into '26, this continued kind of sequential growth in Signatera. Like, are you seeing any—obviously, IMvigor is driving bladder—but across the landscape, like, kind of what are you seeing and what is baked in? Just want to get a flavor of what is going on in the field.

Steven Leonard Chapman: Yeah. So, yeah, I guess when you are looking at sort of across different tumor types, you know, there is a lot of different activity across the board. I mean, you know, if you just look at all the data that has come out over the last several years, you know, you highlighted IMvigor. I mean, certainly, that has been driving a lot of momentum in bladder. I think this, you know, this recent data that Alex mentioned at ASCO GU, looking at bladder preservation, I think it is going to generate a lot of excitement. You know? But, you know, it is all the data that we generated historically.

Now as physicians start to use the product, maybe they use it in one tumor type. They become comfortable with it. They like it. Then they see data come out in another tumor type, and they start using it, you know, in another tumor type. Or maybe they start within a tumor type using it on one category of patients. They realize they like the data that is being generated, and then they expand within that tumor type to another category. So, you know, all of that together, I think, is powering the growth.

There is not one, you know, there is—it is not like there is one factor that is unlocking growth or that, you know, is going to really kind of change things. It is a big flywheel effect of having over 100 peer-reviewed papers, having a large commercial team, having a large medical affairs team, and being present in many, many offices now, seeing more than 50% of doctors ordering the product, and then continuing to invest in new clinical trials and, you know, rounding up the product portfolio with Signatera Genome and Latitude.

Daniel Gregory Brennan: Okay. Great. Thanks for that, Steve. Maybe just on one outside of Signatera. Mike, just in terms of the modeling for 2026 between women's health and claims. I heard you say something in the prepared remarks about seasonality in women's health. Can you just give us a bit more of a bridge on those businesses and how we think about whether it be price, volume, total revenue, anything to help with the model there?

Michael B. Brophy: Yeah. Sure. No. So I think that for Prospera, for the organ health products, I mean, I think they are going to just continue to grow kind of on a secular growth trend. Right? So that, you know, this was, you know, better than 50% plus grower in '25, and I expect another big year from Organ Health this year. And that is really kind of driven by, I think, just the evolution of that market and the primacy that cell-free DNA is continuing to exhibit in terms of caring for patients. For women's health, I mean, it is actually—you know, Steve mentioned, you know, we are off to a great start. Q1 usually is our big quarter.

You know, I expect to, you know, just continue to grow, you know, volumes in the kind of mid-single digit range for women's health, and I think you can do better than that on revenues because there is, I think, juice to squeeze in terms of, you know, achieving pricing gains as we have done the last couple of years. Let me pause there. I do not know, Steve, you want to compare, contrast? You want to add to that?

Steven Leonard Chapman: No. I think that covers it.

Operator: Your next question comes from the line of Douglas Anthony Schenkel with Wolfe Research. Please go ahead.

Douglas Anthony Schenkel: Hey, guys. It is Doug. Thanks for taking the question. This is, I think, a follow-up maybe on Catherine's question earlier, and sorry if I just misunderstood the answer. But on Signatera volume and mix, what was the breakdown between Exome, Genome, and Latitude in the fourth quarter? How are you thinking about mix in 2026? And how does that play into kind of upside and downside scenarios for gross margin? And then, you know, sort of related, is it fair to assume that CRC will dip below 50% of total Signatera—and Latitude for that matter—volume, as indications like breast and lung continue to accelerate and gain further traction this year? Thank you.

Steven Leonard Chapman: Yeah. Thanks. Good question. So, yeah, I would say on CRC, you know, certainly, we think over time, things will sort of normalize to, you know, roughly kind of what you would see in the marketplace from the standpoint of, you know, cancer prevalence. I mean, obviously, breast is going to be the largest over time. And so I think CRC will normalize, but, you know, it is still driving, you know, a good part of volume at this point. But we are already starting to see—while CRC is growing and we are maintaining our share there—you know, some of the other tumor types are really starting to accelerate.

And I think that is, you know, that is great for us because we have spent the last eight years generating data in these other tumor categories, and now some of that data, like this head and neck data, you know, is just coming out now for the first time. And we are in a position to capitalize on that. When you look at the mix of Exome, Genome, and Latitude, I think the vast majority of volume is Exome. We are seeing some interest in Genome in certain physician offices and academic centers, and it is great that we can service that.

You know, those that are interested in that, you know, we have sort of built in an increase over time there, and that is part of our, you know, existing model. And then from a Latitude standpoint, I think the initial kind of idea there was, you know, there is a small portion of cases, you know, maybe 5% or something in that range, where, you know, we are not getting the—you know, we are not able to get the tissue in CRC. And in those cases, you know, we can now serve those patients with Latitude. But there is also another opportunity, which is just physicians who just want tumor-naive.

And while we think the vast majority of people—and what we are seeing is the vast majority of people—want tumor-informed, there is a subset that want tumor-naive, and that is a growth opportunity that we have not really pursued. And I think that is an opportunity for us as well as we move forward. Hopefully, that gives you a little bit more color.

Douglas Anthony Schenkel: That was fantastic. Thank you very much.

Operator: Your next question comes from the line of Casey Woodring with JPMorgan. Please go ahead.

Casey Woodring: Great. Thank you for taking my questions. Maybe the first one, curious if there is any meaningful contribution from lymphoma or multiple myeloma volumes embedded in the 2026 framework for Signatera? And just more broadly, how should we think about potential upside from heme MRD volumes?

Steven Leonard Chapman: It is a great question. So I would say when you look at the model that we just sort of outlined, I would say the contribution is relatively limited. But we think, again, you know, that is a big opportunity for us. If you look at the overall market, you know, the strength with bringing the Foresight team in and just their experience and the, you know, the amount of data that they generated there, the reputation that they have there, I think it is a big opportunity for us.

So, you know, again, it is sort of conservative in the model, but when you look at the potential for upside there, I think that could really be one of the growth drivers.

Casey Woodring: Got it. That is helpful. And then maybe just another one follow-up for me. On Japan, I think you have said in the past you could see approval for Signatera there in '26 with preliminary coverage, to set up a launch in '27. What would this preliminary coverage decision mean for Signatera ASPs and the volume opportunity next year? And curious if coverage would be capped until we see a full readout from CIRCULATE-Japan? And then any thoughts on the build-out from a salesforce perspective in Japan or lab capacity and what that would mean for OpEx? Thank you.

Steven Leonard Chapman: Yeah. So, I will make a couple comments, and then maybe John or Solomon, if you guys want to jump in. But, you know, we have already built out a, you know, reasonably sized sales team there and established a strong distribution partnership, and we are in a position to launch, you know, very soon, you know, when we get the final approval. You know, from an ASP standpoint, you know, we think the ASP is going to be good if you just look at sort of historical precedent. And, you know, I think we are in a great position. You know, obviously, we generated some incredible data in Japan. The test is sort of already baked into the guidelines.

So I think we are in a great position to generate a lot of volume and revenue as we work into 2027. You know, I think throughout the calendar year '27 and, you know, finishing '27, Japan is going to be making a very, very solid impact on our revenue.

Solomon Moshkevich: Yeah. Just to build on what Steve said, there are a similar number of patients with colorectal cancer in Japan as in the U.S. despite the smaller population. And when you look at similar molecular genetic products, you see pricing highly similar to the U.S. We do not need to wait till the end of CIRCULATE to launch, or rather the readout you are referencing. We are in the final stages now with the regulatory authorities there and looking forward to a big launch later this year.

Casey Woodring: Awesome. Thanks, guys.

Operator: Your next question comes from the line of Subhalaxmi Nambi with Guggenheim. Please go ahead.

Subhalaxmi Nambi: Hi. This is Ricky on for Subbu. Thanks for taking our questions. Wondering what you saw with respect to market share changes in the women's health market in 2025? And then what your guidance and some of the volume comments you made for women's health is assuming with respect to further market share gains?

Steven Leonard Chapman: Yeah. It is a great question. So, you know, we do not really have data on, you know, what everybody else is doing in women's health. But I can say for us, we had a record year. We know we did very, very well in women's health, and we are off to a great start in Q1. And I think all of that was done, you know, really without having the 21-gene Fetal Focus test, which we now have. And we are seeing that physicians like it. And it is giving us an opportunity to go close new customers that, you know, previously we have not had access to. And I think it is a good opportunity for us.

So, you know, we do not really know exactly, you know, about others' share, but I can say, you know, for us, you know, we are growing our business, and we are seeing record numbers.

Operator: Your next question comes from the line of Dan Leonard with UBS. Please go ahead.

Dan Leonard: Thank you very much. I am wondering how you are framing the opportunity around higher sensitivity for Signatera. You now have a couple shots on goal there between Genome, which you have not talked about in a while, and now the phased variant product as well. So just help me provide some better, you know, framing or context around what the opportunity looks like there.

Steven Leonard Chapman: Yeah. So, you know, certainly, I think on today's call, we kind of mentioned the phased variant approach getting down below one part per 10,000,000 in LOD studies. And we think that data is, like, incredibly strong performance. You know, if you look at, I think, the published analytical validations, I think that performs very, very well. You know, what we are doing is we are trying to get the best product possible to physicians and backing that with very strong data. And so we have the Exome MRD test, which works very, very well, we think has shown incredible performance when you look across studies.

Then for those who want the Genome-based test, we are making that available as well. We announced at JPMorgan that we are versioning the Genome-based offering, and that is going to now include phased and structural variants. And that is going to be launching soon. So, you know, I think we really will have a gold-plated MRD offering for those that want that. And then on the other hand, we have a highly published, highly tested, reliable MRD product with significant numbers of outcomes data with the Signatera Exome product. And that is setting up an incredibly competitive positioning for us. And we have also augmented that with the Latitude tumor-naive MRD.

Of course, there is competition, you know, but we think we are in a good position, and we have put ourselves in a great spot by generating a lot of data and innovating and investing in research and development to, you know, continue to lead the pack.

Dan Leonard: Appreciate all that. And then just on the topic of SG&A, can you help me better understand how you are able to keep SG&A flat in 2026 yet still grow revenue, I think it was at a pro forma clip of 26%? What is making the salesforce more efficient?

Steven Leonard Chapman: Yeah. You know, Mike, do you want to comment on that?

Michael B. Brophy: Yeah. Sure. I mean, I think it is just, you know, it is still a lot of like—we wanted to grow our way to the next level for some, you know, big kind of breakeven, and now we are kind of getting closer to profitability, not by making cuts, but by making investments and growing the top line. So we did that in spades in '25. We built out the commercial teams really across the board, but with a particular concentration in oncology. Those teams are ready to go, and they are in position to drive a lot more top line than they have today just because they have been new and they are kind of coalescing.

So I think it is a good case study in how we can drive leverage in the business. And not to say that we will not make—like I said in the prepared remarks—we will not make opportunistic investments, not to say that things will not come up that we think are worthy uses of capital. But I think it underlines our kind of core strategy over time.

Steven Leonard Chapman: Thank you very much.

Operator: Your next question comes from the line of David Westenberg with Piper Sandler. Please go ahead.

David Westenberg: Hi. Thanks for taking the question. How should we think about how MolDX is going to think about histology types for Latitude? Basically, what I am kind of asking here is how can you use your infrastructure and learning to kind of feed that process and coverage? And how is ADLT going to work as you know, have Exome, Genome, Latitude, all those kind of things? Is there a way to tuck it in or, you know, is it just completely different? There is no possible way. And how should we think about reimbursement periods?

Steven Leonard Chapman: Yeah. That is a good question. So, you know, we think—we are not planning to submit for an ADLT for Latitude, just based on, you know, the fact that there are other tumor-naive MRD tests on the market, and there are other MRD tests. So we do not think tumor-naive are eligible for an ADLT, and I think that we, you know, we have kind of said that previously without getting FDA approval. But, you know, when we look at other tumor-naive MRD products and how they have been priced, we think that is sort of well established, and we will be able to kind of get similar pricing. So, you know, we submitted for CRC.

As we launch other products in the future, we are going to generate and publish validation data for those and then submit for those as well. There is not really, you know, there is not really a shortcut process. You know, you have to, you know, generate the data and, you know, publish it and submit it. And, luckily for us, you know, we started this back in, you know, mid-2015 trying to generate data. And, you know, so we have kind of ten years now of data that we can rely on.

And in some cases, we have biobanks or samples we can go back to and rerun when we are looking at the Latitude product, and I think that is going to help us get moving very closely.

David Westenberg: Thanks. A quick follow-up for Mike. How are you thinking about the ROI on some of these R&D investments? You did mention on the call technology advancement for MRD. Can you kind of just explain what that means? And are there any, in your mind, NCCN-generating studies that could be coming out soon? And tissue types other than CRC and muscle-invasive bladder cancer. Obviously, I do not mean soon, like, next six months. I kind of mean, like, two years, three years. But thanks.

Michael B. Brophy: Yeah. I mean, kind of the basic components of how I think about returns to capital invested on R&D generally. I mean, Signatera is a great case study. It is just, hey, what is the TAM? What is the potential for incremental both volume growth and pricing growth? And the R&D really hits on both of those metrics. I mean, in terms of the volume growth, you know, when you have a study that is in the New England Journal that is a landmark study in muscle-invasive bladder cancer, that drives a lot of incremental volume. Over time, you know, we hope that it will also kind of drive kind of guideline inclusion.

So the volumes at what is already a high-margin product drive very clear ROICs. Then the data that ultimately gets you into guidelines drives the ASPs much higher than they are right now. So if you just recall, I mean, when we get paid, we get paid something like $3,000 per test. The ASPs is where we have been talking about are in that kind of $1,220 range. Right? So the delta there is just kind of non-covered tests, and the way that you get there is investment in more clinical trials, more evolution of the product. And you can get really comfortable with the ROICs because you see these lines. Right? Like, these volumes are repeat volumes.

You get very comfortable that we can have very rapid volume growth. So any investment that drives incremental realized pricing per test, it is easy to see where the ROICs come from there.

Operator: Your next question comes from the line of Daniel Markowitz with Evercore ISI. Please go ahead.

Daniel Markowitz: Great. Thank you for taking the question. Just one quick one. On the OpEx guide, it is nice to see the operating leverage should really start to turn on in 2026. But it sounds like you are leaving yourself some freedom to spend more should it make sense and you see an opportunity with the ability to fuel future growth. I guess, how do you define the threshold of what makes sense to spend on in excess of the guide? Because I am sure there is no shortage of opportunities that could fuel future growth. Thanks.

Michael B. Brophy: Yeah. Look, I mean, it comes back to the question that David just asked. I mean, it really just comes down to ROIC. I mean, whether that is a, you know, small acquisition like what we did with Foresight or, you know, internal projects. We take each project with kind of an ROIC framework. And, you know, we are—this—I am still the newcomer on the management team on the phone here. I mean, this is year 11 for me and all these other guys. Like, each one of these guys has been here longer than me.

So we have got a very long time together evaluating all of these different opportunities and then trying to just rank, you know, each one and understand, you know, there is a risk-benefit, there is an execution challenge associated with each one, and we just try and make the right decision kind of based on what the right returns are and what is best for the patients.

Operator: And ladies and gentlemen, that is all the time we had today for questions. This does conclude today's conference call. Thank you for your participation and you may now disconnect.

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