Natera NTRA Q1 2026 Earnings Call Transcript

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DATE

Thursday, May 7, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Steve Chapman
• President, Clinical Diagnostics — Solomon Moshkevich
• General Manager, Oncology; Chief Medical Officer — Alexey Aleshin
• Chief Financial Officer — Michael Brophy

TAKEAWAYS

• Total Revenue -- $697 million, reflecting 39% year-over-year growth, driven by volume increases across all core businesses.
• Unit Volume -- Over 1 million tests processed, marking the first time this milestone has been achieved in a single quarter.
• Clinical Oncology Units -- 249,000 processed, a 55% increase year over year and up approximately 24,000 sequentially from Q4 2025.
• Gross Margin -- Just under 65%, exceeding the previously guided 64% midpoint and prompting an updated full-year midpoint forecast of 65%.
• Women's Health Volume -- 63,000-unit sequential increase in Panorama and Horizon tests (excluding most Fetal Focus orders) from Q4 2025, indicating rapid adoption.
• Fetal Focus Launch -- Approaching an annualized order run rate of 200,000 tests with high client retention and new customer acquisition since introduction.
• Signatera ASP -- Achieved approximately $1,250 per test, up sequentially, with further guided exit ASP of $1,275 for the year; significant upside potential targeted.
• R&D Guidance Increase -- R&D spend forecast raised by $50 million, attributed to accelerated enrollment and expansion of clinical trials, particularly the FIND ECD study.
• MRD Clinical Evidence -- Pan-cancer MRD meta-analysis to be presented at ASCO includes over 3,000 patients and 15 solid tumor types, demonstrating broad association of ctDNA positivity with recurrence risk.
• Japan Market Entry -- PMDA approval for Signatera expected in Q2 2026, with broad commercial launch planned soon after and CRC volume opportunity comparable to the U.S. market.
• Cash Collection Timing -- Bundled CMS pricing implementation caused a temporary DSO increase in the quarter; collections subsequently normalized in April.
• SG&A Expense Q1 -- Elevated by approximately $25 million in nonrecurring, non-cash charges, with normalization expected for the remainder of the year.
• Women's Health ASPs -- Growth observed in average selling prices for women's health products, complementing volume increases.
• Stock-based Compensation Impact -- Integration of Foresight Diagnostics contributed one-time equity charges to Q1 COGS, affecting margin by about two percentage points.
• Work-in-Process Adjustment -- Only about 92% of received volume recognized as revenue versus typical 95%-96%, creating a transient gross margin headwind that is expected to normalize.
• MRD Platform Expansion -- Ongoing Medicare submissions for multiple new cancer histologies; broader coverage could unlock further ASP and volume growth.
• Foresight Integration -- Acquisition benefits include stronger research collaborations and heightened pharmacological engagement, supporting expansion in hematologic malignancies.
• Signatera Technology Update -- Phased variant technology launch for clinical use scheduled later this year, with positive anticipated impact on hematology market share.

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RISKS

• Steve Chapman noted, "We tried hard to recover a lot of those, but we definitely were not able to get the full recovery," indicating weather-related headwinds constrained potential unit growth in the quarter.
• Michael Brophy highlighted a "modest step-up in DSOs this quarter" due to temporary implementation delays for new CMS bundled pricing, which delayed some Signatera cash collections.

SUMMARY

Natera (NASDAQ:NTRA) delivered record financial and operational results, surpassing $697 million in revenue and crossing the 1 million processed unit threshold for the first time in a single quarter. Robust clinical adoption and sustained ASP gains in core women's health and oncology fueled this growth, with strategic expansion visible in both product launches and new markets such as Japan. Management raised both revenue and gross margin guidance following strong execution, supported by a reset in volume and pricing assumptions, and increased R&D spending was explicitly linked to early achievement of enrollment milestones in landmark clinical studies. The company's differentiated technological position—highlighted by further rollout of phased variant technology and upcoming pan-cancer evidence reads—positions Natera for continued leadership in molecular diagnostics.

• Solomon Moshkevich emphasized, "MRD testing is not only about finding recurrence earlier. It can also help avoid overtreatment, including major surgeries as well as systemic therapy," underscoring the clinical and economic utility of Signatera.
• Enrollment for the FIND CRC screening study is ahead of internal plan, with a pivotal FDA submission targeted for 2027, while prior clinical studies already suggest strong performance in detecting challenging precancerous lesions.
• Japan's CRC market is expected to double the global addressable Signatera volume, with groundwork already laid through clinical society guideline endorsements and pre-commercial institutional adoption.
• Recent health economic analyses in colorectal cancer were referenced as demonstrating potential system-wide savings of 21%-43% with MRD-guided management.
• Michael Brophy indicated that realization of higher ASPs and margin improvement is not fully baked into 2026 guidance, representing potential upside if private payer or expanded Medicare coverage progresses as anticipated.

INDUSTRY GLOSSARY

• MRD (Minimal Residual Disease): The small number of cancer cells that may remain in a patient's body during or after treatment, detectable using sensitive molecular assays, and used to guide therapeutic decisions in oncology.
• ASP (Average Selling Price): The average price realized per testing unit, after adjusting for all payers and contract terms.
• DSO (Days Sales Outstanding): A measure of the average number of days it takes for a company to collect payment after a sale has been made.
• TOMR (Treatment On Molecular Recurrence): An oncology paradigm involving intervention upon the molecular detection of cancer recurrence, rather than waiting for clinical or radiographic relapse.
• PMDA: Pharmaceuticals and Medical Devices Agency, Japan's regulatory body overseeing approval of diagnostics and therapeutics.
• PMA (Premarket Approval): The FDA's process of scientific and regulatory review for the evaluation of medical devices and diagnostics intended for commercial distribution.

Full Conference Call Transcript

Michael Brophy: Thank you for joining our conference call to discuss the results of our first quarter of 2026. On the line, I am joined by Steve Chapman, our CEO, Solomon Moshkevich, President, Clinical Diagnostics, and Alexey Aleshin, General Manager of Oncology and our Chief Medical 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 website as soon as it is available.

Starting on Slide 2, during the course of this conference call, we will make 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 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 actual events or results could differ materially.

Please refer to the documents we file from time to time with the SEC, including our most recent Forms 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, May 7, 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, and unless otherwise noted, each such reference represents a year-over-year comparison. And now I would like to turn the call over to Steve. Steve?

Steve Chapman: Thanks, Mike. Let us get to the highlights. We had another excellent quarter as you can see here. We posted revenues of $697 million in Q1, 39% growth over last year. Even at our scale, Q1 shows we are still in rapid growth mode. It was just a short while ago that we celebrated a milestone by delivering 1 million units in a year. Q1 was our first to deliver 1 million units in a single quarter, headlined by excellent volume performance in women's health and another record growth quarter for oncology. We feel like we are just getting started.

On women's health, the core business grew exceptionally well, and we had a very successful launch of our Fetal Focus product. The Fetal Focus launch is exceeding expectations based on the strength of our technology and data from the prospective blinded multi-site EXPAND trial. We are winning new customers and experiencing high client retention rates. We are approaching a run rate of nearly 200,000 Fetal Focus orders, which is impressive given our recent launch date. In oncology, we processed 249,000 clinical oncology units in the quarter, which is 55% growth over last year and yet another record, with roughly 24,000 units over the Q4 results. This is the biggest increase we have ever achieved.

In February, we guided to full-year gross margins of 64% at the midpoint, and we are pleased to have exceeded that level in Q1 with gross margins coming in at just under 65%. The rapid increase in volumes in Q1 actually harmed margins by roughly two percentage points because we had more samples in process in the lab at the close of the quarter than normal, impacting our received versus reported ratio. This will resolve itself as we move forward. We believe we are in a very good position relative to the guide.

Given the fantastic start to the year, we are pleased to fully reset the revenue guide range by more than $120 million and increase our gross margin guidance to 65% at the midpoint. Enrollment in oncology clinical trials, including new interventional MRD trials and the FIND ECD study, are well ahead of schedule, so we are going to bump R&D expectations by $50 million primarily to pull forward these trials. Of note, on the FIND ECD study, we are pleased to announce that we should be fully done enrolling in Q3 of this year, which is super exciting given the huge opportunity that provides as we look to a 2027 launch. Alex will cover this later on the call.

On volume, I want to thank our team for getting us over 1 million units in a quarter. Natera, Inc. employees are very passionate about our mission to improve health, and it shows in our performance. We fired on all cylinders in Q1 with another strong organ health quarter to go alongside record units in oncology, and a very strong women's health quarter. While we do expect Q1 to be strong due to seasonality, this was really an incredible quarter and nearly the most unit growth we have seen since I took over as CEO. We have seen a lot of new account momentum with the launch of Fetal Focus, as we will describe on the next slide.

As a reminder, Fetal Focus is our next-generation single-gene test powered by our ultrasensitive SNP technology and enables direct assessment of fetal cell-free DNA across 21 genes associated with serious early onset conditions. We continue to see strong interest from clinicians, particularly given the test's ability to address a common gap in prenatal care, specifically when paternal screening is not available. That demand is now transitioning into meaningful scale. We are approaching an annualized run rate of approximately 200,000 test orders reflecting strong adoption across OBGYNs and MFMs. For clarity, we do not count these Fetal Focus orders in our test processed numbers when Horizon is negative for one of the 21 conditions tested.

When we say we saw an incredible growth quarter, we are really referring to the core Horizon and Panorama testing, and not including the majority of these Fetal Focus orders, which would boost our numbers even higher. Importantly, this growth is supported by a strong clinical foundation. The EXPAND trial has been a major success and was selected for an oral plenary presentation at the Society of Maternal-Fetal Medicine meeting, a rare distinction that underscores both the quality of the data and its clinical relevance. As a reminder, the EXPAND trial is a prospective blinded multicenter study that has definitive genetic outcomes on all participants, both positives and negatives.

The goal is to enroll about 2,000 patients into the study, and this has been ongoing now for several years. The EXPAND results were recently submitted for peer-reviewed publication, and we believe we will continue to see Fetal Focus emerge as a meaningful contributor to growth in the women's health business. The next slide shows our clinical MRD volume progression over time. First, let us look at the total number of MRD tests. Getting nearly 250,000 tests is an incredible number, and we are now on a run rate of over 1 million MRD tests annually. We were able to grow by approximately 24,000 units in Q1, which was another record for our team.

It is amazing to think we are still in the early stages of what MRD can become. In the volume, we are continuing to see strong growth in the core indications of colorectal and breast cancer, while seeing increasing contributions from other cancer types. The Q1 growth was a result of some major milestones in 2025, where we had a steady cadence of important data readouts and publications across uterine, breast, colorectal, and lymphoma. A major highlight was our bladder cancer data being presented at ESMO and then being published in the New England Journal of Medicine.

We are still seeing the impact of this data in our volumes, in bladder cancer and beyond, as it always takes time to see new data translate into real behavioral changes in the doctor's office. In addition to the new data, we launched the integration with OncoEMR across their network of 4,500 physicians, creating a much more seamless ordering experience. You will recall that we also expanded our commercial footprint last year, and I think we are seeing those reps start to contribute in a real way. We also differentiated our platform with the acquisition of Foresight Diagnostics.

The Foresight integration is going well, and their deep research and clinical relationships have also been a tailwind for Signatera adoption in a clinical setting. Many hematologists are starting to order Signatera MRD for their lymphoma patients, and the biopharma interest has really been picking up in both heme and solid tumors based on the value of the phased variant technology. We are pleased to see this working well thus far. We have also listed some of the wins from the first few months of the year on this slide, and we believe they will drive future MRD growth across tumor types. Revenue growth is being amplified by realized average selling prices continuing to climb.

We spent a lot of time detailing all the hard work and investment we put into obtaining reimbursement for covered services, and those efforts continue to bear fruit. Unit ASPs were up across the board in women's health and organ health, and Signatera ASPs reached another high, now at roughly $1,250. The second driver to realized pricing growth is worth watching as well. Even as women's health continues to grow, the rapid expansion of organ health and oncology units being a contributing increasingly large share of total revenues is a further amplifier of revenue and gross margin growth in the future.

As a reminder, in Signatera we have many histologies in submission to Medicare and are currently engaged in the standard cycle of coverage review, which represents additional ASP runway in the second half of this year. As we talked about in the past, we previously set out a long-term Signatera ASP target of $2,000 per test. We think we are still on track to hit that goal as more private payers start to pay and a broader set of indications gets covered. Just at our current annualized volumes, a $2,000 ASP would generate an additional $750 million in revenue and gross profit per year.

In addition to the ASP growth this quarter, COGS per unit in the lab were clean, largely holding steady with a very strong Q4 performance. Layered on top of these unit COGS were a couple of factors that we think are transient that impacted margin in the quarter, and without these, we would have been about 2% higher. First, we took a larger than usual stock-based comp charge to COGS as part of the close of the Foresight acquisition in Q4. Second, a larger impact was just the amount of work in progress we held in the lab at the March close.

We only billed out recognized revenue on about 92% of our cases received in the quarter, while that ratio is normally 95% to 96%. Since we take cost charges as we use materials and labor to process cases in the lab, we had a larger than usual bolus of cases hitting COGS but not revenue in the quarter. This happened because the volume coming into the lab was so high, particularly at the end of the quarter, which is, of course, a good sign for us. I expect this factor to normalize in subsequent quarters. With that, I will turn it over to Solomon to discuss more details from the quarter. Solomon?

Solomon Moshkevich: Thanks, Steve. In my section, I want to highlight several new sources of clinical and economic utility that we are observing with Signatera. There is a big new story emerging about the ability to use Signatera in certain patients to determine who might avoid surgery. On this slide, we have three examples where data was presented or published in the first quarter of the year showing that certain patients, if they test Signatera MRD negative, can forego surgery. In bladder cancer, data presented at the ASCO GU conference showed that Signatera MRD-negative patients who avoided cystectomy had similar outcomes as those who had the surgery. The investigators concluded that ctDNA-negative patients may avoid immediate cystectomy.

This is a huge deal, as bladder-sparing approaches are in extremely high demand due to the heavy impact on quality of life. In rectal cancer, a paper was published in the journal Cancers showing that after neoadjuvant therapy, Signatera MRD-negative patients who chose to avoid surgery had excellent outcomes. Again, sparing the rectum could have a huge impact on quality of life. So it looks like Signatera can really change the risk-benefit equation and potentially drive massive clinical and economic benefit. Finally, in breast cancer, a paper was published in Clinical Cancer Research showing that women 70 and older with early-stage ER-positive disease who tested Signatera MRD negative at diagnosis were able to forego surgery and remain progression-free.

The authors wrote that this can facilitate surgical de-escalation. The broader implication here is important. MRD testing is not only about finding recurrence earlier. It can also help avoid overtreatment, including major surgeries as well as systemic therapy. Physicians are very enthusiastic about this new data and the opportunity to de-escalate surgery. And as a reminder, Signatera is already covered by Medicare in all of these indications. We look forward to proving this out in other cancer types and continuing to build out the value proposition. Moving on now, I want to highlight the recently announced interim analysis from the ALPHA-3 trial.

Sponsored by Allogene Therapeutics, ALPHA-3 is the first randomized study in large B-cell lymphoma to identify patients with positive MRD following frontline therapy and to intervene with an experimental second-line treatment while the disease burden remains low. As shown on the slide, the data demonstrated a clear separation between the trial arms. MRD clearance was 58% in the treatment arm versus 17% in the observation arm, representing a 41-point absolute delta. We also observed quantitative molecular responses, with median ctDNA levels decreasing 98% from baseline in the treatment arm, while increasing 27% in the observation arm. I will note that this interim futility analysis leveraged MRD clearance as an endpoint in addition to MRD status for patient enrollment.

As a reminder, this trial was already underway when we acquired Foresight Diagnostics in December. On the basis of this positive readout, we congratulate our colleagues from Foresight and from Allogene. We look forward to completing the trial and hopefully enabling a valuable new therapy in the arsenal for patients with B-cell lymphoma. With this data plus the 15 abstracts presented at the ASH conference, we are seeing a growing wave of interest from biopharma in hematology and beyond. While this trial drives treatment on MRD based on a single time point after the completion of first-line therapy, we are seeing the TOMR concept really take off across the board.

INVIGOR011 was a TOMR trial as well, in that case with up to seven time points in the first year post-surgery. Treatment on MRD creates a new paradigm, enabling both earlier, more aggressive interventions for patients destined to recur as well as deferred interventions for patients with low likelihood of recurrence. In the surveillance setting today, patients are usually monitored but not treated until recurrence is visible on a scan. TOMR changes that by using MRD to trigger earlier treatment and intervention when disease is first detected in the blood, which is usually before it becomes detectable on a scan.

We are seeing this idea play out in multiple pharma-sponsored trials, including ALPHA-3 in lymphoma, STELLAR-316 in colorectal cancer, TREAT-ctDNA and DARE in breast cancer, and INVIGOR011 in bladder cancer. We look forward to launching more of these. In the adjuvant setting, instead of treating all comers with systemic chemo or immunotherapy, TOMR allows MRD-negative patients to avoid therapy and continue surveillance. If they later become MRD positive, treatment can be escalated at that time. Perhaps the most important finding from our perspective from the INVIGOR011 trial was that patients who delayed initiation of immunotherapy until they turned MRD positive enjoyed the same high level of therapeutic benefit as those who started immunotherapy right after surgery.

That unlocks a major sea change in how patients are treated. In INVIGOR011, 47% of patients were persistently MRD negative over the course of the first year and avoided adjuvant systemic therapy completely, achieving excellent long-term outcomes, including two-year overall survival of 97%. We estimate that a course of adjuvant immunotherapy can cost around $196,000 per year, not to mention the cost of managing adverse events. So avoiding this cost in approximately half of bladder cancer patients can be extremely valuable to the patient and to the system.

We think the value proposition in bladder cancer holds up even with the advent of new perioperative treatment approaches, like with EV+pembro, where many doctors are telling us that they will consider withholding the EV component in patients who test MRD negative after surgery. The EV component itself is estimated to cost over $100,000 per patient and to be more toxic than pembrolizumab. We see a similar story playing out across disease types, with TOMR translating into meaningful clinical and economic utility.

In colorectal cancer, for example, at least two different health economic studies have been presented in the past, one by a Blue Shield plan and one by a large private payer in the UK called Bupa, showing that MRD-guided treatment in stage II and III colorectal cancer can result in meaningful cost savings to the system ranging 21% to 43%. With that, I will turn it over to Alex to provide an outlook on upcoming data readouts and our launch in Japan. Alex?

Alexey Aleshin: Thanks, Solomon. Turning to ASCO this year, we have a powerful opportunity to reinforce Natera, Inc.'s leadership in MRD. The headline is clear: breadth, scale, and momentum. We will have 35 abstracts spanning TOMR, pan-cancer MRD, phased variant technology, real-world evidence, and trials in progress. That level of output matters because it shows Signatera is not a single-tumor, single–use case, or single-study story. We are building the evidence base for MRD across the full oncology landscape and doing it at a scale that we believe is unmatched. The presentation I would highlight is the pan-cancer MRD meta-analysis. This is an important step forward because it moves the discussion beyond individual tumor-type wins to a broader platform-level statement.

Across 18 published studies, more than 3,000 patients, and 15 solid tumor types, ctDNA positivity was strongly associated with recurrence risk in both the MRD window and surveillance settings. These data reinforce the clinical relevance of tumor-informed ctDNA across cancers and support the idea that MRD is becoming a foundational tool in oncology. That message is also reflected across the broader ASCO program. We will be presenting data in colorectal cancer, bladder, breast, lung, lymphoma, melanoma, ovarian, uterine, sarcoma, and other tumor types, showing the expanding role of Signatera across settings from adjuvant decision-making to surveillance, treatment response monitoring, and treatment on molecular recurrence.

The TOMR data are particularly exciting because they point to where oncology is heading, moving from reactive treatment after radiological relapse to earlier, more precise interventions at the molecular recurrent stage. And our phased variant technology presentations in lung cancer and lymphoma further highlight how our technology platform continues to advance, pushing sensitivity in settings where detection is especially challenging. Together, these data reinforce three core messages: Signatera is broadly clinically actionable today, our technology platform continues to advance, and our evidence generation engine is operating at unmatched scale. Looking at the next slide, it is remarkable to see how we have continued to launch important trials that we believe deliver compelling data to advance MRD testing in breast cancer.

What you are seeing here is the scale and depth of the clinical work we have built, spanning every stage of disease from early to metastatic. We have continued to expand our evidence base with 22 peer-reviewed publications and 84 presentations at leading medical meetings, reflecting both the momentum and growing interest from the clinical community. At the same time, we continue to advance our prospective trial pipeline with high-impact studies across multiple settings, including interventional randomized studies like SAFE-D, DARE, and HEROES, each answering an important question including de-escalation, TOMR, and treatment optimization in exceptional responders, respectively.

Underpinning all of this is a substantial investment now exceeding over $250 million in breast cancer trials alone, reflecting both the opportunity we see and the barrier to entry it creates for others trying to build a comparable dataset. So when you zoom out, the breast cancer program is really strong, and we look forward to announcing additional game-changing trials in the near future. We are expanding the evidence base, deepening clinical utility, and investing ahead of what we believe will be long-term adoption. Now I want to talk about two major areas of upside for Natera, Inc.: early cancer detection and the Japan Signatera launch.

First, turning to early cancer detection, FIND CRC is one of the most exciting milestones ahead for Natera, Inc. This is our FDA-enabling colorectal cancer screening study targeting approximately 25,000 to 40,000 average-risk adults, including about 70 CRC cases and roughly 1,400 advanced adenomas. Enrollment is progressing above plan, and we are now on pace to complete enrollment for the PMA submission in Q3 2026, supporting the path forward for an FDA PMA readout in 2027. What makes this especially compelling is that we are not starting from a blank slate. In FORESEE CRC, a prospectively enrolled study of average-risk asymptomatic participants, we previously demonstrated 22.5% sensitivity for advanced adenomas at 91.5% specificity.

That is important because these were not easy-to-detect lesions. Nearly all were under 30 millimeters, and more than 90% were under 20 millimeters. In other words, we are seeing encouraging performance in exactly the kind of challenging precancerous lesions where blood-based screening has historically struggled. That matters because the biggest opportunity in colorectal cancer screening is not just finding cancer earlier; it is helping prevent cancer by detecting advanced adenomas before they progress. This is where we believe Natera, Inc. can be differentiated. And strategically, CRC screening is only the first step. As we advance FIND CRC, we are also building the foundation for a broader early detection platform, including development of a multi-cancer early detection assay.

So, again, we are ahead of plan here with trial enrollment. Finally, a note about the outlook for our launch in Japan. Japan is one of the most exciting near-term growth opportunities for Signatera and, importantly, it has the potential to become a meaningful volume accelerator. PMDA approval remains on track for Q2 2026, and commercial launch preparations are advancing for a broad commercial launch shortly after. The CRC opportunity alone is significant. Japan has a similar absolute number of colorectal cancer diagnoses as the United States, and we estimate that a launch could effectively double Signatera's annual CRC volume TAM.

Over time, expansion into additional histologies could make Japan a broader platform market, with MIBC submission being the next prioritized use case given the INVIGOR011 data. What gives us confidence is that the market is already being seeded. Through CIRCULATE-Japan and GALAXY, Signatera has been used across more than 150 institutions, giving hundreds of oncologists firsthand experience before commercialization. In addition, both JSMO and JASCO have issued supportive clinical practice guidelines for MRD testing, creating a favorable clinical backdrop for adoption. That familiarity could help volumes ramp faster than our base case assumption. Japan’s structure also supports rapid adoption; with a single national payer, one positive reimbursement decision can open broad access across the country.

So the message is clear: Japan can be a step-change opportunity, expanding our global MRD market, accelerating commercial volumes, and reinforcing Natera, Inc.'s leadership worldwide. With that, let me turn it over to Mike to review the financials. Mike?

Michael Brophy: Great. Thanks, Alex. The next page is just a summary of the financials compared to last year. On revenues, we had another good quarter of sequential ASP progress across the board. We had about $60 million in revenue growth this quarter, in line with Q4 and, of course, smaller as a percentage of revenue compared to Q4. Given the longer history we now have with improved realized pricing, we took a modestly more aggressive approach with accruing higher prices for selected payers and products that have strong payment track records. This is just an incremental shift from our historical approach, and we will continue to turn the dial on ASPs if the cash receipts continue to exceed our expectations.

Signatera ASPs are now roughly at $1,250, as Steve described. We achieved that just by continuing to execute our playbook of driving better alignment with smaller Medicare Advantage plans and grinding out more consistent reimbursement for covered services in the biomarker states. In addition to those factors, we got a bump from the improved bundled pricing CMS announced at the beginning of the year, which has more than offset the modest decline in ADLT rates we spoke about on the November call.

While the new bundled pricing is fully reflected in the revenue results, that change actually caused a temporary delay in cash for Signatera, as we had to take some time to update our list pricing for each covered tumor type, reload each bundled price back into the system with all of our payers, and revalidate the engineering. So that caused a modest step-up in DSOs this quarter. We have now gotten the new prices largely loaded in and have seen the delayed cash arrive in April, so collections for Signatera are back on track.

On the guide, we are really pleased with the start to the year and happy to be completely resetting the revenue guide up $120 million at the midpoint. The guide is a lot higher, and the underlying drivers look achievable to us at this point in the year. On volumes, we continue to expect quarterly growth in Signatera along the lines of the trailing twelve-month average as we have described in the past, and we expect to see organ health continue to grow on its current trend line.

The revenue guide also bakes in the seasonality in volumes we typically see in women's health where Q1 is our strongest quarter, Q2 the slowest, and then we see recovery in the second half of the year. As Steve mentioned, we have got a pathway to continue grinding ASPs higher. For example, the original guide contemplated getting $50 in ASP gains on Signatera this year. The new revenue guide implies we anticipate exiting 2026 by roughly $1,275, and, of course, we are pushing to be higher than that. There is significant opportunity among the private payers and from expanding Medicare coverage to new indications.

I think we can get to the $1,275 ASP without additional coverage decisions, so those would be upside to our guide. On gross margins, we feel good given the per-unit COGS we saw in Q1, and we should have some tailwind in the send-to-receive ratio in the next few quarters. Given those factors, current ASP trends, and the Q1 actuals baked into the annual number, we think resetting the midpoint at 65% still leaves room for upside as we progress through the year. As a reminder, when guiding to future periods, we do not include the impact of revenue true-ups, so those would represent further upside to the guide. On OpEx, we are holding SG&A steady as planned in March.

We are pleased with the progress so far with all the growth initiatives we have in place in sales and marketing and continue to get scale in our operations that are not needing to grow anywhere near as fast as revenue. We have deployed a significant amount of AI capability around the business in the last year, and I think we are well positioned to drive more efficiency over the near term. On R&D, I am pleased to see the FIND study progressing faster than expected, and we have been very glad to invest in more clinical trials for Signatera that have become available to us this spring.

We have a long track record of generating high ROICs in our R&D effort, and our plan is to stay ambitious to maintain our leadership position across the portfolio. We will now open the call for questions.

Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press 1 on your telephone keypad to raise your hand and join the queue. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your questions. Again, it is 1 to join the queue. Our first question comes from the line of Doug Schenkel with Wolfe Research. Your line is open.

Douglas Anthony Schenkel: Good afternoon, and thank you for taking my questions. I will keep them to two, and they are both financial. First, on gross margin, you had a really nice quarter even normalized for catch-ups. You bumped up full-year guidance by about a point. That said, it does seem like you could have gone further than that. Are you holding back largely because of things like MRD mix and trying to get a better handle on how that is going to play out given it is only May? Second question is on spending, specific to the SG&A line. It jumped up a bit as a percentage of sales relative to what we saw in the fourth quarter.

Were there any timing dynamics or things that you would consider one-timers that we should contemplate as we evaluate spending discipline in the quarter and update our models? Thank you.

Michael Brophy: Hey, Doug. Thanks for the questions. On gross margins, this is a philosophical point with respect to our guide. I am biased towards the upside as it relates to our gross margin trajectory through the course of the year, but we are always looking out for potential risk factors to gross margin. As we talked about in the prepared remarks, if you dial down to the unit economics and strip out items like the Foresight equity charges we paid out as part of the deal, cost per unit and ASPs are looking really clean. I laid out a couple of the drivers for ASPs going forward, particularly related to Signatera, which we are excited about.

We did not include all of the potential drivers in the guide, so I agree there could be upside there. On SG&A, Q1 is often elevated as it relates to sales and marketing expenses. We had a number of items in the quarter that do not repeat and a couple of true one-timers related to balance sheet adjustments that were non-cash charges. I am roughly estimating those were worth about $25 million in the quarter. When you back that out and normalize, that gives me confidence around the SG&A guide for the rest of the year. More generally on OpEx, our posture is to marry spending discipline with remaining opportunistic. We recognize we have a huge growth runway ahead.

If higher ROIC opportunities come in the door, we will not hesitate; we will keep our foot on the gas to ensure we maintain leadership across these businesses.

Operator: Our next question comes from the line of Dan Brennan with TD Cowen.

Daniel Gregory Brennan: Great. Thanks for the questions. Maybe first on volumes. Steve, you called out that 92% of tests got recognized in the quarter, atypical versus 95% to 96%. How unusual is that? If you just apply 95% to 96% this quarter, that would be another 10,000 tests, maybe a real Signatera blowout. Is that factored into Q2? Should we see a big bump there? Second, related to MolDx, what is the latest thinking on pan-cancer potential? Is that something we could potentially see this year or next, or will it be single cancer by single cancer?

Steve Chapman: Thanks. I will take the MolDx comment, and then Mike can talk about the received-to-reported ratio, which should be more favorable in Q2. We are feeling really good. We have something like seven additional histologies in submission, and those went in around Q4. We have already had one round of back-and-forth with MolDx, and these are all following the standard process we have seen. We are feeling positive about it.

The ones in submission right now would make up the vast majority of the remaining non-covered business for us, and as we said, that would have a value in the range you outlined, so it could be very meaningful, both from getting Medicare payment and with commercial payers starting to comply with the biomarker state laws. Ultimately, we think we are on a trajectory to get to around a $2,000 ASP. If you just multiply that by our volume today, that would be worth something like $750 million in revenue and margin. We are working on those paths to unlock.

Michael Brophy: Send-to-receive is usually about 95% to 96%. It is not unusual to have a very high ratio in Q4 and a low ratio in Q1. That is actually our typical experience. The factor is similar to what Steve described in the prepared remarks. When the women's health business is rocking like it did in Q1, that is a very high-volume enterprise. If you bring in a ton of units in the last week or two of the quarter, you will end the quarter with a lot of units in process that have not been reported out yet. We have to take the COGS as they come in the lab, but we cannot recognize revenue until they are reported out.

So it is a work-in-process, transient issue, and I expect it to normalize over subsequent quarters. I think that was about a 1.5% plus gross margin headwind in the quarter, which, spread over the balance of the year, is another factor that gives us confidence in bumping the gross margin guide.

Operator: And our next question comes from the line of Tycho Peterson with Jefferies. Your line is open.

Analyst: Hey team, this is Lauren on for Tycho. One on Fetal Focus: did you notice any specific share trends relative to the broader market this quarter? What are you seeing in terms of pricing pressure or competitive intensity in core women's health overall? Second, around Latitude: following the CRC data in January, you talked about additional tumor types. Have you worked out what that looks like later this year? And in terms of the reflex testing strategy, how frequently is Latitude being used as a reflex when tissue is insufficient, and how do you see Latitude volumes long term this year?

Steve Chapman: Thanks. On Fetal Focus, we feel very good, both on the quality of the data and the volume we are seeing. We had a very strong Q1 in women's health. We added 63,000 units in women's health from Q4 2025 to Q1 2026, which we think is incredibly strong and compares very favorably to others in the space. On Latitude, we are doing very well with the CRC rollout and seeing a lot of interest. The majority of physicians prefer the tumor-informed products, but in the limited cases where they are not able to get tissue, it is great that we have Latitude available.

We have had a lot of great data, physicians are happy with the product, and we can reflex quickly when tissue is not available. We have built the technology platform to expand beyond CRC to other histologies, and we will be doing that in the future. We will provide updates as that progresses.

Operator: And our next question comes from the line of Patrick Donnelly with Citi. Your line is open.

Analyst: Hey, thank you for taking the question. On the Signatera side, nice to see the sequential build. You have talked about looking at the trailing four quarters on the build. Can you talk about the momentum you saw throughout the quarter and the right way to think about that build going forward?

Steve Chapman: Thanks a lot. What we have seen in Signatera is consistent growth in new patients, and that continued very strongly through the end of the quarter, which is a positive sign. We also look at patients on surveillance and repeat rates, and that continues to be strong. There are a couple of dynamics driving growth. First, doctors that have used the product become more comfortable and expand their usage, either deeper within a histology like colorectal or laterally to other histologies within their practice. Second is new customers who have never tried Signatera before.

We have said something like 45% to 50% of oncologists had tried Signatera in the quarter previously, which means there is still about half who have not, and we are targeting that half. As more data comes out, that drives both new customers and expansion within accounts. Roughly 250,000 tests is a lot of tests, and we feel really good about the impact we are making on patient care, but it is also just the beginning. We have invested in clinical trials and product enhancements. We have exciting things coming at ASCO and technology advancements launching later this year. We feel we are in a very good position.

Operator: And our next question comes from the line of Subbu Nami with Guggenheim.

Subhalaxmi Nambi: I have just one. One of the leading players in the rare disease market has had some challenges with reimbursement and mix. Is this dynamic relevant for you? And bigger picture, how is Zenith ramping, and how are you differentiating there?

Steve Chapman: Thanks a lot. We launched our rare disease product called Zenith, and it is going really well so far. Volumes are relatively low at this early stage, but we feel really good about the product offering and physician feedback. We are not really impacted by the dynamics others have highlighted because we are pretty early on, so it is all upside to us at this point. There is a lot of opportunity there, and it is a new growth factor for us. Another near-term and very large area is early cancer detection for CRC. Alex talked about that in the prepared remarks.

We are going to be done with the trial enrollment in a couple of months, which will put us in a great position to commercialize in the near future and be submitting to FDA in 2027.

Subhalaxmi Nambi: Should we expect data readout end of this year or early next year?

Steve Chapman: Pivotal PMA data from the definitive trial will be read out in 2027.

Subhalaxmi Nambi: Perfect. Thank you so much.

Operator: And our next question comes from the line of Daniel Markowitz with Evercore ISI. Your line is open.

Analyst: Hi, this is Mackenzie on for Daniel. Thanks for taking my questions. Can you talk a little bit more about the CRC launch in Japan? It sounds like that could come in the back half of this year. Can you talk about visibility to adoption and what that ramp might look like? And then, can you give us an update on any momentum or other developments in the biomarker states?

Steve Chapman: That sounds good, and I want to clarify one thing I mentioned earlier. On women's health, we grew 63,000 units quarter over quarter from Q4 2025 to Q1 2026, and that really does not count Fetal Focus orders. Only a couple of thousand Fetal Focus tests are counted in that number. The vast majority of that 63,000 are just Panorama and Horizon orders because if Horizon is negative and Fetal Focus is ordered, we do not count that in our numbers. So we could be counting the growth as much higher, but that 63,000 is really just the core women's health business.

On Japan, we know it has the same number of CRC diagnoses per year as the United States, and we have been waiting to be in this position where we will have regulatory approval, reimbursement, and our commercial launch. All that is happening. We are less than six months away from being off to the races in Japan. We have had a lot of really good conversations, and things are on track. Initially, the goal is to have that initial time point covered and then, down the road, get surveillance covered and scale from there.

Solomon Moshkevich: Two elements in Japan. Given MRD already being recommended in several major Japanese medical society guidelines, we do expect significant adoption post approval and reimbursement. It is hard to size units right now, and we will provide that as we tighten up models. On pricing, there is strong health economic and clinical rationale, so we think we are in a good position to negotiate solid pricing with the Ministry. That will happen post regulatory approval, so we will operate sequentially and provide updates towards the end of the year ahead of launch. We are looking forward to making a big impact for CRC patients in Japan.

Operator: And our next question comes from the line of Callum Tishmarsh with Morgan Stanley.

Analyst: Thanks a lot for taking the question. Mike, could you help us understand how the cost ramp could look for the screening asset, between R&D and commercial costs down the line? It is a different cost profile to the core business, so help us split the two and how we could expect that to shape through 2026 and beyond. And a follow-up on Signatera: can you talk through momentum in terms of same-store sales versus new additions, depth versus breadth?

Michael Brophy: Got it. There are two components to the cost for the ECD launch. One, you have the R&D cost associated with the FIND trial, and two, you have commercialization and launch costs in SG&A. For the FIND trial itself, we are well down the path now. As you heard, we are close to completing enrollment, and then we have to spend to run the samples. That is largely reflected in the guide. We bumped R&D this quarter specifically because enrollment ramped much quicker than anticipated, which is a great sign. Beyond that, the only variable would be if there are additional things we can do to further accelerate; we will be opportunistic.

Much of that will be incurred this year and perhaps early next year as we run samples, within our normal R&D budgeting process. On commercialization, we feel like we have good channels to leverage in launching the assay. In terms of building out a larger commercial channel specific to primary care, we will leg into this and build incrementally as we deliver volume, leveraging our experience in the OB/GYN call point. We will build on that sales team on the back of success, the same way we did in women's health and then in oncology.

Operator: And our next question comes from the line of Casey Woodring with JPMorgan. Your line is open.

Casey Woodring: Great. Thanks for taking my questions. Steve, you mentioned you are seeing the reps added last year start to contribute to MRD growth in a real way. Where are you with getting that cohort of new MRD reps up to speed and fully productive? How much more runway is there for Signatera growth from those reps ramping, or are they fully ramped at this point?

Steve Chapman: I would say we are probably between 50% and 75% ramped. They are really starting to become productive mid-Q1 through Q1 and turning into Q2, so there is still a little more juice to squeeze. That is contributing to targeting new customers and helping with cross-selling with some of the specialization we have. We are also investing in medical education, and that is going well. We expect to continue to see momentum from these initiatives. We had record numbers and continue to see very strong growth leaving the quarter, with the same strong trajectory we have seen.

Also, a lot of growth is starting to come from new areas that, once they get going, like lymphoma, are big markets that by themselves would be their own company, and we have many of those. As those start to get going, the flywheel turns and creates bigger opportunities. The other thing I will mention is initiatives within pharma. Some of the reps we added are focusing on Natera, Inc.'s data business and AI tools where we have unique capability, or on pharma sales in oncology. We are seeing an incredible amount of momentum there. There has been hiring, they are starting to hit their stride, and you can expect to hear a lot more as that continues.

There is tons of interest, expanded by the acquisition of Foresight and the ultrasensitive levels we are getting with phased variant technology. That is another area of excitement.

Operator: Our next question comes from the line of Kathryn Schulte with Baird.

Catherine Schulte: Maybe first, we have heard others in the space call out weather as an impact in the quarter. Clearly, volumes were very strong for you, but did you see any winter storm impact?

Steve Chapman: Good question. We did, and we did not call that out in prepared remarks. The storms that hit in January caused a step down in units. We tried hard to recover a lot of those, but we definitely were not able to get the full recovery. Despite having a record quarter across the board and record growth in oncology, it would have been much faster had we not had those storms, but we did so well despite them that we did not call it out.

Catherine Schulte: Great. And then for Signatera, what portion of patients would you say are adhering to the surveillance schedule you have laid out? Is there untapped utilization there?

Steve Chapman: We pay attention to that and have seen pretty consistent usage in surveillance over time. It depends how many years out the patient is. In colorectal, a protocol of four times a year for the first year and then two times a year thereafter mirrors what you see with CEA. Not everybody stays on that—patients may recur, unfortunately pass away, or feel they have moved on and do not want to keep being monitored. We do see good adherence, and we always try to increase it. Some doctors do not believe in surveillance; that is an upside opportunity as more data comes out.

Many do believe and try hard to keep patients on a consistent protocol, which is a big reason you are seeing growth.

Operator: Great. Thank you. And our next question comes from the line of Puneet Souda with Leerink Partners.

Puneet Souda: Yes, hi. First on prior authorization: there has been news from CMS and larger payers on prior authorization. How often do you see prior authorizations on Signatera or other products, and to what extent do you think payers reducing prior authorization would be a tailwind this year? And then on Foresight, are you launching any Signatera with phased variants in the clinic? Any reception or early feedback?

Steve Chapman: On prior auth, that has definitely been a tool payers have used to not pay even for covered services. Any action that limits prior auth for covered services will help our ASPs. We commend strategies that make access to care easier for covered services and view that as an upside opportunity for us. On Foresight and phased variants, the team is getting ready to launch, and there is a ton of excitement from physicians. Solomon?

Solomon Moshkevich: We are planning to launch an updated version of the Signatera genome-based assay that will include phased variants later this year. It is already available in the research setting for pharma and academic researchers, and that has driven a lot of excitement and additional conversations. We already have at least one more major pharma-sponsored trial contracted leveraging that capability. On the clinical side, I do not think this is holding anyone back. Especially in lymphoma, hematologists are excited to be able to order Signatera for their patients.

We showed strong data at ASH in December on the performance of the current Signatera assay in lymphoma, and together with the Foresight partnership and reputation, this has already driven an inflection in willingness and enthusiasm to order MRD for those patients, especially given it is in the guidelines. We feel good about this area.

Operator: And looks like we lost our caller. Ladies and gentlemen, that will conclude our question and answer session and today’s call. We thank you for your participation, and you may now disconnect.

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