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GRAIL, Inc. (GRAL)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered solid execution but a mixed print: total revenue rose 19% year over year to $31.8M while U.S. Galleri revenue grew 22% to $28.7M; net loss improved 51% YoY to $106.2M and adjusted EBITDA improved to $(98.7)M .
  • Versus Street: EPS of $(3.10) was a beat against consensus $(3.99), while revenue of $31.8M missed the $35.2M consensus; EBITDA was weaker than consensus on an unadjusted basis, while company-reported adjusted EBITDA improved YoY .
  • Guidance and cash: Management maintained FY U.S. Galleri revenue growth framework (20–30%) and reiterated FY25 cash burn “no more than $320M,” with runway into 2028 .
  • Narrative/catalysts: Positive top-line results from the prevalent screening round in the registrational NHS-Galleri trial and operational wins (athenahealth EHR integration; Quest ordering) provide near-term sentiment support despite the revenue miss .

What Went Well and What Went Wrong

What Went Well

  • Commercial momentum: “More than 37,000 Galleri tests completed in the first quarter of 2025” and U.S. Galleri revenue up 22% YoY to $28.7M; repeat testing now >20% of volume .
  • Clinical/regulatory trajectory: “Positive top-line results” from NHS-Galleri prevalent screening round; CSO accuracy and specificity consistent with PATHFINDER (PPV materially higher than 43% observed in PATHFINDER) .
  • Operating improvements: Transition to enhanced Galleri with automation to lower variable COGS over time; adjusted gross profit up 19% YoY to $14.3M; adjusted EBITDA improved to $(98.7)M .

What Went Wrong

  • Top-line vs Street: Revenue missed consensus ($31.8M vs $35.2M*), partly reflecting seasonally softer Q1 versus Q4 and early-stage benefits from new channels (Quest, TRICARE) still ramping .
  • Development services softness: Q1 development services revenue fell to $2.7M from $3.2M YoY, weighing on non-screening mix .
  • Ongoing cash burn and competitive overhang: Q1 cash burn just under $90M; investors probed need for capital raise amid potential competitor launches and multi-year path to PMA/CMS reimbursement .

Financial Results

Summary vs Prior Quarters

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$28.652 $38.252 $31.837
Diluted EPS ($USD)$(3.94) $(2.89) $(3.10)
Net Loss ($USD Millions)$(125.688) $(97.066) $(106.213)
Adjusted EBITDA ($USD Millions)$(108.156) $(84.031) $(98.735)
Adjusted Gross Profit ($USD Millions)$11.818 $17.936 $14.305

Actual vs S&P Global Consensus (Q1 2025)

MetricActualConsensus Estimate*Surprise
Revenue ($USD Millions)$31.837 $35.200*Miss
EPS ($USD)$(3.10) $(3.99)*Beat
EBITDA ($USD Millions)Company Adjusted: $(98.735) Street EBITDA: $(91.35)*Mixed (definitions differ)

Values with an asterisk were retrieved from S&P Global.

Segment Revenue Breakdown

MetricQ3 2024Q4 2024Q1 2025
Screening revenue ($USD Millions)$25.374 $31.551 $29.133
Development services revenue ($USD Millions)$3.278 $6.701 $2.704
Galleri revenue ($USD Millions)$25.374 $31.551 $29.133

KPIs

KPIQ4 2024Q1 2025
Galleri tests completed (#)>40,000 >37,000
Repeat testing (% of volume)N/A>20%
U.S. Galleri revenue ($USD Millions)$31.6 $28.7
Cash, cash equivalents + ST securities ($USD Millions)$766.8 $677.9

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
U.S. Galleri revenue growthFY 202520–30% (shared in January) On track; framework maintained Maintained
Cash burnFY 2025~$325M (Aug-2024 restructure) No more than $320M Lowered
Cash runwayMulti-yearInto 2028 Into 2028 Maintained
Tariff impactFY 2025N/ANo major impact expected New disclosure

Earnings Call Themes & Trends

TopicQ3 2024 (Prior-2)Q4 2024 (Prior-1)Q1 2025 (Current)Trend
Technology/automationPreparing scalable lab; efficiency focus Enhanced Galleri version rolled out; 4x samples per flow cell Variable COGS improvements as scale increases Improving cost efficiency
Channels/access (Quest/TRICARE/EHR)Quest integration announced TRICARE coverage confirmed; Quest live Early ordering via Quest; TRICARE contracting; athenahealth integration Ramp underway
Clinical evidence (NHS-Galleri/Pathfinder)Registrational studies progressing Final study visits completed; 2025/2026 readouts NHS-Galleri prevalent round top-line positive; PPV above PATHFINDER; mid-2026 full readout Strengthening signal
Tariffs/macroN/AN/ANo major tariff impact expected Neutral
Competitive landscapeN/AMonitoring bill/reimbursement timeline Competitor launches expected; watching OpEx impact Watchful
R&D spend/efficiencyRestructuring to extend runway Moderated burn; runway to 2028 Q1 burn < $90M; FY burn ≤ $320M Improving burn
InternationalN/AN/AIsrael commercial launch Expanding reach

Management Commentary

  • “We are very pleased… to share positive top line results from the prevalent round of screening in the 140,000 participant NHS-Galleri trial.” – CEO Bob Ragusa .
  • “We were pleased to see a substantially higher PPV than the 43% observed in the PATHFINDER study… specificity 99.5% and CSO accuracy 88% consistent with PATHFINDER.” – Sir Harpal Kumar .
  • “More than 37,000 Galleri tests… Repeat test volumes have moved higher… more than 20% of Galleri volume today is repeat testing.” – CFO Aaron Freidin .
  • “We’d expect to see margins continue to improve over the rest of the year as we increase scale… you’ll see variable COGS improvements come over time.” – CFO Aaron Freidin .

Q&A Highlights

  • Cost/margin trajectory: Management expects margin improvement through 2025 as enhanced Galleri scales; variable COGS improvements to accrue post-transition .
  • Channel/coverage cadence: Quest ordering showing early uptake; TRICARE coverage progressing through contractor processes; more updates expected later in year .
  • Cash burn/runway: Q1 burn under $90M; reaffirmed FY25 burn ≤$320M and runway into 2028 .
  • Competitive outlook/OpEx: Monitoring other MCED launches; no immediate need to reaccelerate OpEx; will reassess over coming quarters .
  • NHS-Galleri PPV disclosure: PPV in prevalent round “substantially higher” than 43% in PATHFINDER; exact figures withheld to preserve trial integrity until full readout (mid-2026) .

Estimates Context

  • Revenue missed Wall Street consensus ($31.8M vs $35.2M*), likely reflecting seasonal Q1 softness and the early-stage ramp of Quest/TRICARE; EPS beat ($(3.10) vs $(3.99)*) on cost controls and lower operating expenses .
  • The company’s adjusted EBITDA improved YoY, but Street’s EBITDA consensus compares to a different definition (unadjusted), limiting like-for-like interpretation; focus remains on adjusted EBITDA trajectory and burn reduction .

Values with an asterisk were retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term: Expect sentiment support from NHS-Galleri positive top-line and channel expansions (Quest, athenahealth, TRICARE), but revenue cadence may be lumpy as coverage implementations and provider workflows scale .
  • Watch the burn and margin trajectory: Enhanced Galleri automation should lower variable COGS as volumes grow, supporting adjusted gross profit and reduced burn toward ≤$320M in 2025 .
  • Evidence milestones: Pathfinder 2 interim later 2025 and NHS-Galleri full readout mid-2026 are critical catalysts for PMA and eventual coverage; PPV, specificity, and CSO performance appear encouraging .
  • Competitive readiness: Management is monitoring upcoming MCED offerings; current stance does not assume OpEx reacceleration, but competitive data could influence go-to-market choices .
  • Policy/reimbursement: Continued bipartisan/bicameral support for MCED legislation; eventual CMS timeline and ASP assumptions remain a medium-term thesis variable .
  • Trading lens: Mixed print (EPS beat, revenue miss), with clinical and channel catalysts likely dominating narrative; pullbacks on headline misses may be opportunities ahead of 2H25/2026 data milestones .

Appendix: Additional Data and Sources

  • Press release and 8-K financials (Q1 2025): Revenue $31.8M (+19% YoY), U.S. Galleri revenue $28.7M (+22% YoY), net loss $(106.2)M, adjusted EBITDA $(98.7)M, adjusted gross profit $14.3M; cash and ST securities $677.9M .
  • Prior quarters: Q4 2024 revenue $38.3M; adjusted EBITDA $(84.0)M; cash $766.8M . Q3 2024 revenue $28.7M; adjusted EBITDA $(108.2)M .
  • Operational partnerships: athenahealth EHR integration (ordering for >160k clinicians) ; Quest Diagnostics ordering system live .
  • Earnings call transcripts: Prepared remarks and Q&A citing volume, repeat testing, tariffs, burn, and PPV disclosure -.

Values with an asterisk were retrieved from S&P Global.