Executive Summary

Q3 2025 revenue of $592.2M grew 34.7% YoY and 8% sequential; gross margin reached 64.9%, aided by ~$55M revenue true-ups; EPS was ($0.64) .
Results materially exceeded Street revenue consensus ($514.8M*) but missed EPS consensus (-$0.371*), driven by higher Opex including ~$60M one-time items and stepped-up R&D .
Guidance reset: 2025 revenue raised to $2.18B–$2.26B; gross margin to 62–64%; SG&A lifted to $1.08B–$1.18B; R&D to $575M–$625M; net cash inflow ~$100M .
Key catalysts: accelerating Signatera adoption (record +21.5k clinical MRD units q/q), landmark IMvigor011 survival benefit (41% OS improvement), and Fetal Focus 20-gene panel expansion; management highlighted AI-enabled scalability and improving ASPs/DSO metrics .

What Went Well and What Went Wrong

What Went Well
- Record clinical MRD unit growth (+21.5k q/q) with broad oncology adoption; Signatera ASPs ~$1,200 and DSOs improved to 49 days vs 57 in Q2 .
- Landmark ESMO data: IMvigor011 and CheckMate-274 support ctDNA-guided adjuvant therapy; Signatera-positive patients saw 41% OS improvement; serial surveillance every 6 weeks validated .
- Guidance raised across revenue and margins with stronger cash generation: “we are now formally expecting to generate roughly $100 million in cash for the full year” .
What Went Wrong
- EPS missed consensus due to elevated Opex (SG&A and R&D), including ~$60M one-time expenses accumulated year-to-date; net loss widened to ($87.5M) vs ($31.6M) LY .
- True-ups meaningfully contributed to revenue and GM (Q3 ~$55M), making “core” GM ex true-ups 61.3%, which investors may adjust for comparability .
- Early cancer detection AA sensitivity remains challenging (22.5% sensitivity, 91.5% specificity), though improved from pilot; commercial viability hinges on further gains and FIND-CRC outcomes .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$439.8	$501.8	$546.6	$592.2
Diluted EPS ($USD)	($0.26)	($0.50)	($0.74)	($0.64)
Gross Margin %	61.8%	63.1%	63.4%	64.9%
Tests Processed (Units)	775,800	855,100	853,100	893,600
Oncology Tests (Units)	137,100	167,700	188,800	211,000

KPIs and Operating Metrics

Metric	Q2 2025	Q3 2025
Clinical MRD Sequential Growth (Units)	~20,000	~21,500
DSOs (Days)	57	49
Signatera ASP ($)	—	~$1,200
Revenue True-ups ($USD Millions)	$45.3	~$55.1
Gross Margin ex True-ups (%)	—	61.3%

Segment breakdown: Natera does not disclose revenue by segment; management commentary indicates strength across Women’s Health, Organ Health, and Oncology (Signatera) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue ($USD Billions)	FY 2025	$2.02–$2.10	$2.18–$2.26	Raised
Gross Margin (%)	FY 2025	61–64	62–64	Raised (bottom end)
SG&A ($USD Billions)	FY 2025	$0.975–$1.05	$1.08–$1.18	Raised
R&D ($USD Billions)	FY 2025	$0.55–$0.59	$0.575–$0.625	Raised
Net Cash Inflow ($USD Millions)	FY 2025	Positive	~$100	Raised
Original 2025 Revenue Guide ($USD Billions)	FY 2025	$1.94–$2.02	$2.18–$2.26	Raised (full reset)

Drivers cited: volume momentum and ASP improvements, biomarker state reimbursement, Medicare coverage expansion, lean COGS; Opex raised for one-time items (~$60M) and incremental R&D (MolDX submissions; FIND-CRC) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2025)	Previous Mentions (Q2 2025)	Current Period (Q3 2025)	Trend
Revenue/Margins	Revenue $501.8M; GM 63.1%; strong volumes across portfolio	Revenue $546.6M; GM 63.4%; raised guide by $80M	Revenue $592.2M; GM 64.9%; raised guide across metrics	Accelerating
Signatera Adoption	Record growth; multi-tumor utility highlighted	+20k clinical units q/q; broad adoption	+21.5k clinical MRD units; ASP ~$1,200; strong new patient starts	Strengthening
Evidence Generation (ESMO/NEJM)	Pipeline of trials underway	Ongoing outcomes readouts	IMvigor011 and CheckMate-274 show survival/ctDNA utility; serial surveillance validated	Step-change credibility
AI/Technology Ops	—	—	AI driving scale without commensurate headcount; foundation models referenced	Emerging enabler
Women’s Health (Fetal Focus)	—	—	Panel expansion to 20 genes; EXPAND trial validation	Expanding
Early Cancer Detection (CRC)	—	Pilot readouts referenced	AA sensitivity 22.5%/specificity 91.5%; FIND-CRC enrolling; performance improving	Gradual progress

Management Commentary

“We generated $592 million in revenue…Gross margins took a big step up in Q3, coming in at 64.9%” .
“We are raising the revenue guidance by $160 million…now expect revenues in the range of $2.18B–$2.26B…raising the gross margin guide to 62%–64%” .
“We are now in a position to submit seven new MolDX submissions…worth around $250–$300 million in gross profit based on our run rate” .
“We posted another record for DSOs at 49 days compared to 57 days just in Q2…about $55 million in true ups this quarter” .
On IMvigor011: “Signatera-positive patients…improving overall survival by 41%…patients who remained negative…97% overall survival at 24 months” .

Q&A Highlights

Signatera trajectory: New patient starts near all-time highs; low market penetration leaves long runway; 2026 unit growth benchmark tied to rolling four-quarter average .
ASP drivers: Biomarker state reimbursement contributing; MolDX submissions and potential guideline inclusion seen as future tailwinds; note upcoming ADLT reset headwind .
ECD investment: Confidence to fully pursue FIND-CRC after PROCEED readout; 2026 incremental investment “directionally right” versus 2025; minimum viable performance must be “really strong” .
Gross margin outlook: Continued sequential improvement expected; long-term target ~70% reiterated .
Vega trial timing: Event-based; likely 2027 readout; design features (serial testing, crossover) highlighted .

Estimates Context

Metric	Consensus (Q3 2025)	Actual (Q3 2025)
Revenue ($USD)	$514.8M*	$592.2M
EPS ($USD)	-$0.371*	-$0.64
# of Estimates (Revenue)	17*	—
# of Estimates (EPS)	17*	—

Result vs consensus: Revenue beat; EPS missed. Primary drivers included strong volume/ASP and true-ups on revenue, offset by higher SG&A/R&D with ~$60M one-time items in Opex .
Values retrieved from S&P Global.*

Key Takeaways for Investors

Top-line momentum accelerating with multi-pronged drivers (volume, ASP, true-ups) and durable operating leverage as DSOs improve and AI enhances scalability .
Oncology remains the growth engine: record MRD units, expanding indications/reimbursement (MolDX submissions), and landmark outcomes data likely to influence NCCN/FDA pathways—supporting ASP and adoption .
Guidance reset signals confidence: revenue and GM ranges raised; expect sustainable cash generation (~$100M FY) despite elevated near-term Opex .
Watch list: biomarker state reimbursement cadence, guideline inclusion (bladder), ADLT reset impact on ASP, and Q4 true-ups (management modeled without but October cash collections were strong) .
ECD optionality: AA sensitivity improved to 22.5%; FIND-CRC enrollment underway—further performance gains could unlock a high-margin, large TAM screen; monitor updates through 2026 .
Women’s Health differentiation: Fetal Focus 20-gene expansion leverages linked SNP tech and EXPAND validation; potential share gains vs mother-only competitors .
Near-term trading setup: Revenue beat and guide raise are positive catalysts; EPS miss tied to strategic investments. Stock reaction likely keys off oncology evidence momentum and 2026 ASP/units trajectory communicated on the call .

Natera, Inc. (NTRA)·Q3 2025 Earnings Summary