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GH

Guardant Health, Inc. (GH)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was a beat-and-raise quarter: revenue grew 31% year over year to $232.1M on broad strength across Oncology (+22%), Screening ($14.8M) and Biopharma & Data (+28%); non-GAAP gross margin expanded to 66% from 60% YoY .
  • Consensus comparison: revenue significantly beat S&P Global consensus ($232.1M vs $211.3M); non-GAAP EPS beat (-$0.44 vs -$0.515). EBITDA definition differences mean Street EBITDA was weaker than expected even as adjusted EBITDA improved; see Estimates Context for details .
  • Guidance raised: FY25 revenue to $915–$925M (from $880–$890M), Oncology growth to ~20% (from ~18%), Screening to $55–$60M (from $40–$45M), and non-GAAP gross margin to 63–64% (from 62–63%); non-GAAP OpEx nudged higher to support accelerated screening build-out .
  • Key catalysts: Shield CRC gained NCCN guideline inclusion, Shield ASP uplift from ADLT status, Shield MCD earned FDA Breakthrough designation and began NCI Vanguard enrollment, and “Smart Liquid Biopsy” apps expanded G360 Liquid utility—collectively supporting growth and narrative momentum .

What Went Well and What Went Wrong

What Went Well

  • Broad-based growth and margin expansion: Total revenue +31% YoY to $232.1M; non-GAAP gross margin rose to 66% (from 60%); adjusted EBITDA loss improved by ~$10M YoY .
  • Shield CRC scaling faster than plan: $14.8M revenue on ~16,000 tests; ASP >$900 and non-GAAP gross margin reached 48% (vs 18% in Q1, 2% in Q4’24) driven by ADLT pricing and cost controls .
  • Product innovation and strategic wins: 11 new Smart Liquid Biopsy apps for G360 Liquid; Tissue ASP ~$2,000 three years ahead of target; Reveal data publications and MolDx submission for breast; FDA Breakthrough for Shield MCD and NCI Vanguard start .

Management quotes:

  • “Q2 was another exceptional quarter… we introduced 11 groundbreaking Smart Liquid Biopsy applications… significantly expanding the clinical utility” — Helmy Eltoukhy .
  • “Shield continued to generate strong demand… volume, revenue and gross profit grew strongly, ahead of our expectations” — AmirAli Talasaz .

What Went Wrong

  • Continued losses and higher OpEx: GAAP net loss -$99.9M; non-GAAP OpEx rose to $215.3M (+20% YoY) and full-year non-GAAP OpEx guidance increased to $840–$850M to fund screening commercialization .
  • EBITDA/Street metric mismatch: While adjusted EBITDA improved (-$51.9M vs -$61.9M YoY), Street “EBITDA” (S&P-defined) was weaker than consensus (see Estimates Context) .
  • Shield V2 timing uncertainty: Management suggested V2 data/launch may slip beyond year-end; ASP expected to trend to ~$800 in H2 given payer mix shift, tempering near-term upside .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$177.235 $203.471 $232.088
GAAP EPS ($USD)$(0.84) $(0.77) $(0.80)
Non-GAAP EPS ($USD)$(0.48) $(0.49) $(0.44)
GAAP Gross Margin %59% 63% 65%
Non-GAAP Gross Margin %60% 65% 66%
Adjusted EBITDA ($USD Millions)$(61.860) $(58.541) $(51.892)
Free Cash Flow ($USD Millions)$(99.079) $(67.148) $(65.934)

Segment revenue breakdown:

Segment ($USD Millions)Q2 2024Q1 2025Q2 2025
Oncology$130.269 $150.559 $158.685
Biopharma & Data$43.933 $45.376 $56.020
Screening— $5.677 $14.814
Licensing & Other$3.033 $1.859 $2.569
Total Revenue$177.235 $203.471 $232.088

KPIs and operating metrics:

KPIQ2 2024Q1 2025Q2 2025
Oncology test volume (#)—~59,000 ~64,000
Shield test volume (#)—~9,000 ~16,000
Guardant360 Liquid ASP ($)—$3,000–$3,100 $3,000–$3,100
Guardant360 Tissue ASP ($)—~$1,700–$1,800 ~2,000
Reveal ASP ($)—>$600 $600–$700
Shield ASP ($)—~600 >900
Shield non-GAAP Gross Margin %2% 18% 48%
Reveal cost per test ($)>$1,000 (2024) → <500 (2025) <500 <500
Shield cost per test ($)—~500 <500

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($USD Millions)FY 2025$880–$890 $915–$925 Raised
Oncology Revenue Growth (%)FY 2025~18% ~20% Raised
Oncology Volume Growth (%)FY 2025>25% >27% Raised
Screening Revenue ($USD Millions)FY 2025$40–$45 (52k–58k tests) $55–$60 (68k–73k tests) Raised
Biopharma & Data Growth (%)FY 2025Low double digits Mid-teens Raised
Non-GAAP Gross Margin (%)FY 202562–63 63–64 Raised
Non-GAAP Operating Expenses ($USD Millions)FY 2025$830–$840 $840–$850 Raised
Free Cash Flow Burn ($USD Millions)FY 2025$225–$235 $225–$235 Maintained
FCF breakeven (ex-Screening)Q4 2025Q4 2025 Q4 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Smart Liquid Biopsy / Infinity AIUpgrades across portfolio; 18 AACR abstracts; tissue upgrade to DNA/RNA/methylation; EMR integrations supporting depth 11 new G360 Liquid apps launched; continued KOL enthusiasm; accelerating G360 Liquid growth >20% YoY Improving adoption and utility
Shield CRC commercializationADLT status (Medicare rate $1,495 effective Apr 1); VA coverage; early positive gross margin NCCN guideline inclusion; ASP >$900; non-GAAP GM 48%; plan to surpass ~250 reps by YE Accelerating scale, improving economics
Reveal MRDCRC surveillance Medicare coverage; COGS cut >50%; ASP >$600 Breast MolDx submission; IO monitoring study (RADIOHEAD) published; Reveal fastest-growing oncology product Broadening indications, strengthening data
Biopharma & CDxPfizer collaboration; robust pipeline; methylation mix rising Record biopharma revenue; new CDx deals; strong near-term visibility Robust
Shield MCD / VanguardSelected for NCI Vanguard; validation data at AACR (10 cancers; sensitivity 60%, specificity 98.5%) FDA Breakthrough designation; Vanguard enrollment started Advancing clinical readiness
Tariffs/MacroMinimal impact expected; no direct China assay inputs No change; Medicaid exposure minimal (revenue/volume impact negligible) Neutral
Regulatory/GuidelinesShield FDA approval in 2024; Medicare coverage for Reveal CRC surveillance NCCN CRC guideline inclusion for Shield; pursuing ACS/USPSTF inclusions Positive momentum

Management Commentary

  • Strategic positioning: “Product innovation built on Smart Liquid Biopsy is integral to our strategy… to further extend our technical leadership in the comprehensive genomic profiling market.” — Helmy Eltoukhy .
  • Shield growth engine: “Given our performance this quarter… we are further accelerating the build out of our commercial infrastructure and now expect to surpass 250 sales reps by year end.” — AmirAli Talasaz .
  • Profitability roadmap: “Excluding screening, we continue to expect the remainder of the business to reach free cash flow breakeven in the fourth quarter of 2025.” — Michael Bell .
  • ASP drivers: “Shield ASP was over $900 in Q2… Medicare rate increased from $920 to $1,495 following ADLT status… and strong Medicare Advantage reimbursement.” — Michael Bell .

Q&A Highlights

  • Shield ASP outlook/mix: ASP >$900 in Q2; modeling ~$800 for H2 as mix shifts toward commercial; Medicare Advantage collections strong .
  • Shield V2 timing: Management not rushed; V2 remains active but may slip beyond year-end; prioritizing MCD readiness and commercial momentum .
  • Serena-6 impact: Minimal in Q2; potential future driver if drug approved, with G360 monitoring paradigm expanding use cases .
  • Medicaid risk: Very minimal exposure; not a volume/revenue driver .
  • Sales force scale: Targeting >250 Shield reps by YE; long-term plan still ~700; reinvesting screening gross profit into S&M .
  • Tissue advantages: RNA/methylome features; 40% less slides; potential for FDA+ADLT in future; share gains expected .

Estimates Context

Q2 2025 actuals vs S&P Global consensus:

MetricConsensusActual
Revenue ($USD Millions)211.3*232.1
Primary EPS ($USD)-0.515*-0.44
EBITDA ($USD Millions)-68.5*-96.1*
  • Revenue and EPS: Both beats; non-GAAP EPS (-$0.44) exceeded Street’s -$0.515 estimate, while revenue beat by ~10% vs consensus.
  • EBITDA: Street “EBITDA” shows a miss relative to consensus; note Guardant reports adjusted EBITDA (-$51.9M), which differs by definition from S&P’s EBITDA metric .
  • Values retrieved from S&P Global.*

Implications:

  • Expect upward estimate revisions for FY25 revenue, Oncology and Screening lines, and non-GAAP gross margin trajectory following stronger-than-expected ASPs and volumes.
  • Some dispersion may persist around EBITDA given definitional differences; analysts may lean on adjusted EBITDA for comparability.

Key Takeaways for Investors

  • Narrative strength: Multiple tangible catalysts (NCCN inclusion, ADLT pricing, Breakthrough designation, Vanguard start, SLB app launches) support continued top-line acceleration and margin expansion .
  • Beat-and-raise setup: Q2 beat vs consensus and guidance raise across revenue, Oncology, Screening, and margins point to estimate momentum and potential multiple support .
  • Screening economics inflecting: Shield non-GAAP gross margin moved to 48% with ASP uplift; reinvestment strategy should scale volumes while keeping company-wide burn on the 2028 breakeven path .
  • Oncology core resilient: G360 Liquid growth accelerating for the fourth consecutive quarter; Tissue ASP step-up and Reveal expansion into breast/IO reinforce multi-product engine .
  • Watch H2 mix dynamics: Shield ASP modeled ~$800 due to payer mix shift; volumes expected back-half loaded as new reps ramp .
  • Regulatory trajectory: Continued guideline inclusion (ACS, USPSTF) would be significant catalysts for Shield adoption and commercial payer contracting; monitor timing and panel developments .
  • Trade setup: Near-term upside favored by estimate revisions and September Investor Day visibility; risk balancing includes continued losses, higher OpEx to fund screening scale, and timing uncertainty on Shield V2 .