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GH

Guardant Health, Inc. (GH)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue rose 30% year over year to $201.8M, with non-GAAP gross margin at 63% and GAAP EPS at $(0.90); non-GAAP EPS was $(0.62) .
  • Clinical volumes hit records (57.3K oncology clinical tests; 11.05K biopharma tests), and Shield contributed $4.1M from ~6,400 tests in its first full commercial quarter .
  • 2025 guidance introduced: total revenue $850–$860M, non-GAAP GM 62–63%, non-GAAP opex $815–$825M, free cash flow burn $(225)–$(235)M; Screening revenue $25–$30M from 45–50K Shield tests, Oncology clinical volume growth ~25% .
  • Catalysts: Medicare coverage for Reveal in CRC surveillance , ADLT status pursuit for Shield (expected to lift ASP) , debt exchange extending $600M of converts to 2031 .

What Went Well and What Went Wrong

What Went Well

  • Therapy selection strength: Precision Oncology revenue increased 30% to $184.6M; Guardant360 ASP reached ~$3,000 and reimbursement trends yielded ~$8M out-of-period upside in Q4 .
  • Shield ramp: $4.1M revenue and gross margin breakeven in first full quarter, majority covered Medicare patients; management expects gross margin positive in first full year post-launch .
  • Strategic wins: Medicare coverage for Reveal CRC surveillance ($1,644/test), NIH selecting Shield for Vanguard MCD study, and Abu Dhabi CRC screening program inclusion .

Quotes:

  • “We fired on all cylinders throughout 2024, delivering remarkable revenue growth and upgrading our products to our smart liquid biopsy platform.” — Helmy Eltoukhy .
  • “We delivered $4.1 million of Shield testing revenue in Q4... achieved gross margin breakeven for Shield with COGS and ASP approximately $600.” — AmirAli Talasaz .

What Went Wrong

  • Cash burn remained material: Q4 free cash flow was $(83.4)M; FY 2024 FCF burn $(274.9)M despite improvements year over year .
  • Non-GAAP opex rose 17% in Q4 to $215M on one-time litigation and bonus accruals, lifting full-year non-GAAP opex above prior guidance .
  • Development Services & Other gross margin compressed to 53% in Q4 (from 60% YoY), reflecting mix and ramp costs .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$177.2 $191.5 $201.8
GAAP EPS ($USD)$(0.84) $(0.88) $(0.90)
Non-GAAP EPS ($USD)$(0.48) $(0.45) $(0.62)
Gross Margin (GAAP, %)59% 61% 62%
Gross Margin (Non-GAAP, %)60% 63% 63%
Adjusted EBITDA ($USD Millions)$(61.9) $(56.2) $(78.4)
Free Cash Flow ($USD Millions)$(99.1) $(55.3) $(83.4)

Segment breakdown

Segment MetricQ2 2024Q3 2024Q4 2024
Precision Oncology Revenue ($M)$166.5 $180.6 $184.6
Development Services & Other Revenue ($M)$10.7 $10.9 $17.2
Shield Revenue ($M)N/A (pre-launch) N/A (not disclosed) $4.1

KPIs

KPIQ2 2024Q3 2024Q4 2024
Oncology Clinical Tests (units)49,400 53,100 57,300
Biopharma Tests (units)10,475 10,500 11,050
Shield Tests (units)N/A N/A 6,400
Guardant360 ASP (approx., $)N/A>$3,000 ~$3,000

Estimate comparison (S&P Global consensus)

  • S&P Global consensus estimates were unavailable due to system limits. Values retrieved from S&P Global are not provided.*

Guidance Changes

FY 2025 (introduced Q4 2024)

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($M)FY 2025—$850–$860 New
Non-GAAP Gross Margin (%)FY 2025—62–63 New
Non-GAAP Operating Expenses ($M)FY 2025—$815–$825 New
Free Cash Flow Burn ($M)FY 2025—$(225)–$(235) New
Oncology Clinical Volume Growth (%)FY 2025—~25% New
Biopharma & Data Revenue Growth (%)FY 2025—Low double-digit New
Screening Revenue ($M)FY 2025—$25–$30 New
Shield Test Volume (units)FY 2025—45,000–50,000 New

FY 2024 guidance evolution

MetricPeriodPrevious GuidanceRevised GuidanceActual
Total Revenue ($M)FY 2024$690–$700 (Q2) $720–$725 (Q3) $739.0

Notes:

  • Management also previewed revenue presentation changes for 2025: Oncology, Biopharma & Data, Licensing & Other, Screening .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Smart Liquid Biopsy platform (Guardant360)Major upgrade launched; performance highlighted Achieved >$3,000 ASP; strong account breadth/depth ASP ~$3,000; continued volume acceleration expected in 2025 Improving ASP and adoption
Reveal MRD (CRC)COSMOS data submitted to MolDX Managed volumes pre-surveillance reimbursement Medicare coverage for CRC surveillance at $1,644/test; >50% COGS reduction; inflection expected in 2025 Reimbursement secured; volume ramp ahead
Shield CRC screeningFDA approval; commercial launch; Medicare $920 Positive reception; Medicare price reiterated $4.1M revenue; gross margin breakeven; guide $25–$30M; 45–50K tests; pursuing ADLT ($1,495) Scaling with favorable unit economics
Guidelines (ACS/NCCN/USPSTF context)—Medicare price; CMS policy on colonoscopy cost-sharing NCCN MRD updates encouraging; ACS inclusion targeted in 2025; Supreme Court/USPSTF watched; focus on Medicare population Guideline momentum building
International expansion—Italy lab partnership (Policlinico Gemelli) Abu Dhabi CRC program (target 10K year-1; fraction assumed in 2025 guide) Strategic pilots; non-dilutive ASP
Biopharma & DataBiopharma volume +56% YoY Biopharma growth strong; mix shift to Smart Liquid Biopsy 31% FY biopharma revenue growth; ConcertAI collaboration; >180 partnerships Durable growth with data tie-ins
Tissue testing498-gene TissueNext upgrade Announced pricing increase to $3,500 (2025) Major tissue test upgrade planned; Medicare Tissue price $3,500 Strengthening portfolio
Litigation——November jury verdict: $293M in false advertising case; one-time litigation expense in Q4 Resolved; one-time cost impact
Capital structure—Cash >$1.0B at 9/30 2031 converts ($600M, 1.25% coupon, $62.22 conversion); $45M buyback; pro forma cash ~$887M Extended maturities; reduced risk

Management Commentary

  • “Q4 revenue grew 30% to $202 million, bringing full-year revenue to $739 million.” — Helmy Eltoukhy .
  • “Guardant360 ASP... approximately $3,000 in Q4; commercial payer collections led to ~$8M out-of-period upside.” — Michael Bell .
  • “Shield... achieved gross margin breakeven... expecting Shield to be gross margin positive in its first full year post launch.” — AmirAli Talasaz .
  • “Medicare CRC surveillance coverage for Reveal... $1,644 per test.” — Helmy Eltoukhy .

Q&A Highlights

  • Shield guidance and sales force ramp: 100 reps at YE’24, moving toward ~150+ in 2025; back-end loaded productivity; ASP guidance cautious pending ADLT; Abu Dhabi not dilutive to ASP and only a fraction included in volume guide .
  • Reveal adoption vs NCCN: management views NCCN updates as positive and aligned with clinical practice; expects additional indications (breast/monitoring) submissions to MolDX post-publication, earliest 2H25 .
  • Guardant360 ASP durability: $3,000 ASP “here to stay”; upside from expanding commercial coverage beyond current cancer-type and test-version limitations .
  • TissueNext and portfolio strategy: significant tissue upgrade expected; therapy selection strategy leverages both tissue and liquid testing .
  • ACS guideline timing: optimistic for 2025; USPSTF-related Supreme Court watched; current focus on Medicare population limits impact .

Estimates Context

  • S&P Global consensus for Q4 revenue and EPS was not retrievable due to system limits; therefore, explicit beat/miss versus Street cannot be quantified here. Values retrieved from S&P Global are not provided.*
  • On the call, analysts noted Shield guidance ($25–$30M) was “well ahead of... the Street,” indicating potential upward estimate revisions in Screening .

Key Takeaways for Investors

  • Revenue momentum and margin resilience: Q4 revenue $201.8M with non-GAAP GM 63% signals continued operating leverage as reimbursement tailwinds and product upgrades take hold .
  • Therapy selection remains the cash engine: Guardant360 ASP at ~$3,000, with commercial coverage expansion a lever for further ASP and cash collections; out-of-period revenue is non-recurring .
  • Screening optionality: Shield’s favorable Medicare pricing ($920) and pursuit of ADLT ($1,495) plus gross margin breakeven suggests improving unit economics and potential ASP upside later in 2025 .
  • MRD inflection setup: Medicare coverage for Reveal CRC surveillance ($1,644) and >50% COGS reduction point to accelerating volumes in 2H25, with additional indications targeted thereafter .
  • Capital structure de-risked: 2031 converts (1.25% coupon) and buyback mitigate dilution and extend maturities; pro forma cash ~$887M supports multi-year ramp .
  • 2025 guide implies ~19–20% underlying growth ex 2024 out-of-period revenue; Screening $25–$30M and Oncology ~25% volume growth frame the year’s mix shift .
  • Near-term trading implications: watch for ADLT designation for Shield, ACS guideline inclusion, and indication expansions for Reveal; these are potential positive estimate and multiple catalysts .
*Estimates disclaimer: S&P Global consensus could not be retrieved due to system constraints at query time. Where estimates are referenced qualitatively, they reflect analyst remarks on the earnings call.