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GH

Guardant Health, Inc. (GH)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered broad-based strength: revenue grew 39% YoY to $265.2M, non-GAAP gross margin rose to 66%, and non-GAAP EPS improved to $(0.39) . Versus S&P Global consensus, GH beat on revenue ($265.2M vs $235.7M*) and non-GAAP EPS ($(0.39) vs $(0.49)) .
  • Screening scaled rapidly: ~24,000 Shield tests drove $24.1M revenue; oncology volumes rose ~40% YoY to ~74,000 tests; biopharma & data grew 18% . Management highlighted the core business excluding Screening turned free-cash-flow positive one quarter early, reinforcing operating trajectory .
  • Guidance raised for the third time in 2025: total revenue to $965–$970M (31% growth), non-GAAP GM to 64–65%, higher Oncology growth (~25%), Screening to $71–$73M on 80–82k tests; OpEx lifted to fund Shield scale-up .
  • Key near-term stock catalysts: sustained Shield uptake with ASP support from ADLT, accelerating oncology volumes (five consecutive quarters of acceleration), PMA submission for Guardant360 Liquid, and expanding commercial channels (Quest, PathGroup) .

What Went Well and What Went Wrong

What Went Well

  • Broad-based growth and estimate beats: revenue +39% YoY to $265.2M with non-GAAP GM 66%; beats vs S&P Global consensus revenue ($235.7M*) and EPS ($(0.49)) .
  • Shield momentum and infrastructure: ~24k Shield tests (+8k seq), ~55% non-GAAP GM with ASP ~ $880 as Medicare/MA mix supports pricing; high (>90%) completion-to-sample rates improve sales efficiency .
  • Strategic, regulatory, and product advances: PMA submission for Guardant360 Liquid; new CDx approvals (FDA for ESR1 breast; Japan for HER2 NSCLC); partnerships with Quest and PathGroup to expand access .
    • Quote: “This was an exceptional quarter… Notably, this quarter we crossed over $1 billion in annualized revenue.” – Helmy Eltoukhy, Co-CEO .

What Went Wrong

  • Losses and cash burn persist: GAAP net loss $(92.7)M; free cash flow $(45.8)M) though improving YoY; FY2025 FCF burn guided $(225)–$(235)M .
  • OpEx step-up to support Shield: Q3 non-GAAP OpEx $228.9M (vs $187.3M YoY); FY2025 non-GAAP OpEx guidance raised to $865–$875M to fund sales & marketing .
  • Payer mix and reimbursement ramp: Shield ASP buoyed by Medicare/MA; commercial reimbursement remains limited today, creating ASP/mix risk as commercial volumes rise .

Financial Results

Summary (YoY and Seq trends; periods oldest → newest)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$191.476 $203.471 $232.088 $265.196
GAAP EPS ($)$(0.88) $(0.77) $(0.80) $(0.74)
Non-GAAP EPS ($)$(0.45) $(0.49) $(0.44) $(0.39)
Gross Margin % (GAAP)61% 63% 65% 65%
Gross Margin % (Non-GAAP)63% 65% 66% 66%

Actual vs S&P Global Consensus (Q3 2025)

MetricConsensus*ActualBeat/Miss
Revenue ($USD Millions)$235.691*$265.196 Beat
Non-GAAP EPS ($)$(0.4895)*$(0.39) Beat

Values marked with * retrieved from S&P Global.

Segment Revenue ($USD Millions)

SegmentQ1 2025Q2 2025Q3 2025
Oncology$150.559 $158.685 $184.402
Biopharma & Data$45.376 $56.020 $54.731
Screening$5.677 $14.814 $24.112
Licensing & Other$1.859 $2.569 $1.951
Total Revenue$203.471 $232.088 $265.196

KPIs – Volumes

KPIQ1 2025Q2 2025Q3 2025
Oncology tests (approx)~59,000 ~64,000 ~74,000
Shield tests (approx)~9,000 ~16,000 ~24,000

KPIs – Pricing Snapshot (Q3 2025)

KPI (Q3 2025)Value
Guardant360 Liquid ASP~$3,000–$3,100 per test
Guardant360 Tissue ASP~ $2,000 per test
Reveal ASP~$600–$700 per test
Shield ASP~ $880 per test

Notes:

  • Q3 revenue included ~$5M out-of-period oncology revenue and ~$3M out-of-period screening revenue (reimbursement true-ups) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueFY 2025$915–$925M $965–$970M Raised
Oncology Revenue GrowthFY 2025~20% ~25% Raised
Oncology Volume GrowthFY 2025>27% >30% Raised
Screening RevenueFY 2025$55–$60M $71–$73M Raised
Screening VolumeFY 202568k–73k 80k–82k Raised
Biopharma & Data GrowthFY 2025Mid-teens Mid-teens Maintained
Non-GAAP Gross MarginFY 202563–64% 64–65% Raised
Non-GAAP Operating ExpensesFY 2025$840–$850M $865–$875M Raised
Free Cash Flow BurnFY 2025$(225)–$(235)M $(225)–$(235)M Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
AI/Technology initiativesIntroduced 11 Smart Liquid Biopsy apps; upgraded multiomic Tissue CGP (Q2) ; Q1 product upgrades; Shield multi-cancer data Infinity AI enabling “smart apps” with five consecutive quarters of accelerating Guardant360 Liquid volumes Expanding platform utility
Screening (Shield) demand~9k (Q1) and ~16k (Q2) tests; ADLT granted; NCCN inclusion ~24k tests; ASP ~ $880; >90% adherence from order to sample; partnerships with Quest & PathGroup Accelerating adoption
Regulatory/ApprovalsShield MCD granted Breakthrough; NCI Vanguard study started (Q2) PMA submission for Guardant360 Liquid; new CDx approvals (FDA ESR1 breast; Japan HER2 NSCLC); MolDx submissions for Reveal IO Building evidence and labels
ReimbursementShield ADLT $1,495 (Q1) Strong Medicare/MA payments; commercial reimbursement still developing Improving with mix tailwinds
Margins/COGSNon-GAAP GM 66% (Q2) Overall non-GAAP GM 66%; Shield non-GAAP GM 55%; Reveal COGS < $500/test Improving unit economics
Cash flowTargeting core FCF breakeven in Q4 2025 (prior guidance) Core business excl. Screening FCF positive one quarter early Ahead of plan

Management Commentary

  • Strategic message: “This was an exceptional quarter… Oncology volumes grew 40% year-over-year… we crossed over $1 billion in annualized revenue.” – Helmy Eltoukhy, Co-CEO .
  • Screening strategy: “We have accelerated our commercial infrastructure build out and established… Quest Diagnostics and PathGroup to rapidly broaden access to Shield…” – AmirAli Talasaz, Co-CEO .
  • Profitability path: “Excluding screening, we reached a major milestone, with the rest of the business becoming cash flow positive one quarter earlier than expected.” – Prepared remarks .
  • Margin drivers: Shield non-GAAP GM reached ~55% with ASP supported by Medicare ADLT and COGS < $500; Reveal COGS also < $500/test .
  • Pipeline/regulatory: PMA submission for Guardant360 Liquid; additional CDx approvals; MolDx submissions for Reveal IO .

Q&A Highlights

  • Shield ASP durability and mix: Medicare ADLT $1,495 expected to persist “at least for the next two years”; Medicare Advantage payments strong; commercial reimbursement remains the swing factor as mix evolves .
  • ACS guideline timing and coverage flow-through: Management is optimistic but not including ACS guideline upside in guidance; expects initial benefits via appeals/coverage, with broader contracting over time .
  • 2026 outlook: Too early to guide; confidence in long-term Shield targets reiterated .
  • MRD/Reveal cadence: Increasing tests per patient via workflows; IO and chemo monitoring packages progressing (MolDx submissions) .
  • Operating spend: Elevated sales & marketing to scale Shield (250+ reps), with R&D/G&A kept relatively flat near term .
  • Reimbursement specifics: Reveal CRC reimbursed by Medicare at ~$1,640; growing MA/commercial traction .

Estimates Context

  • Q3 2025 beats vs S&P Global consensus: revenue $265.2M vs $235.7M*, non-GAAP EPS $(0.39) vs $(0.49)* *. Given upside in Screening and Oncology volumes/pricing, Street models likely need higher 2H/2026 revenue and margin assumptions, and higher FY2025 top-line (now guided $965–$970M) .
    Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Clear top-line and EPS beat on strong Oncology and Shield contributions; raised full-year revenue and gross margin guidance signal durable momentum *.
  • Shield scaling faster than expected with supportive ASP/COGS; infrastructure partnerships (Quest, PathGroup) expand reach into 2026 .
  • Core business (ex-Screening) turned FCF positive ahead of plan; focus shifts to balancing Shield growth with disciplined OpEx .
  • Regulatory/data pipeline is robust (Guardant360 Liquid PMA, CDx wins, Reveal IO/breast submissions), underpinning medium-term adoption and pricing power .
  • Watch commercial payer progress for Shield (key ASP risk as mix shifts), ACS guideline timing, and multi-cancer data readouts .
  • Near-term trading setup: recurring catalysts (quest integration timeline, guideline updates, incremental CDx/coverage) and estimate revisions provide positive narrative support *.
  • Medium-term thesis: expanding smart-app platform and MRD franchise (Reveal + tumor-informed “Ultra”) broaden TAM and increase tests-per-patient, supporting sustained high-teens+ growth in biopharma & data and >25% in Oncology .

Notes:

  • Some revenue included out-of-period true-ups ($5M Oncology, $3M Screening) .
  • All non-GAAP figures per company definitions; see reconciliations in filings .
  • Consensus values marked with * retrieved from S&P Global.