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Introduction & Market Context
Natera Inc (NASDAQ:NTRA) released its first quarter 2025 earnings presentation on May 8, highlighting continued strong momentum across its testing portfolio. The molecular diagnostics company, which specializes in cell-free DNA testing for oncology and reproductive health, reported substantial revenue growth and improved profitability metrics that exceeded previous guidance.
The company’s stock responded positively to the results, with shares rising 3.83% in after-hours trading to $168.79, building on a 1.72% gain during the regular session. This performance continues Natera’s strong market trajectory, with the stock having more than doubled over the past year.
Quarterly Performance Highlights
Natera reported Q1 2025 revenue of $502 million, representing a 37% year-over-year increase from $368 million in Q1 2024. This strong performance was driven by volume growth across all product areas, with total tests processed reaching 855,000, up 16% from the same period last year.
As shown in the following chart of quarterly revenue growth:
Particularly notable was the performance of Natera’s oncology portfolio, where clinical testing volumes surged to 161,000 tests in Q1 2025, representing a 52% year-over-year increase. The company highlighted that clinical oncology units grew by 16,500 units over Q4 2024, marking a record for sequential quarter growth.
The following chart illustrates this accelerating growth in Signatera clinical testing:
Natera’s gross margin improved to 63% in Q1 2025, up from 57% in Q1 2024, reflecting the company’s continued focus on operational efficiency and favorable average selling price (ASP) trends. The company generated approximately $23 million in cash inflow during the quarter, continuing its positive cash flow trajectory from late 2024.
Product Portfolio Momentum
Natera’s presentation highlighted significant clinical validation progress across its product portfolio. For Prospera Heart, the company’s transplant rejection test, new data published in the American Journal of Transplantation demonstrated improved performance when using the company’s Donor Quantification Score (DQS) technology.
The data showed that Prospera Heart with DQS achieved 86.48% sensitivity and 83.57% specificity, compared to 78.20% sensitivity and 76.92% specificity for the prior method. This improvement resulted in a 37.3% reduction in false-positive cases, as illustrated in the following data:
Additionally, the company reported positive results from its prospective DEFINE-HT clinical trial, which showed that patients with elevated Prospera scores were significantly more at risk for adverse events (HR:2.56, p=0.0299).
In oncology, Natera continues to build its evidence base for Signatera, its personalized molecular residual disease (MRD) test. The company highlighted results from the I-SPY 2 breast cancer trial, which demonstrated that Signatera can predict recurrence at diagnosis and prior to treatment. The study of 712 early-stage, high-risk breast cancer patients found that ctDNA quantification was the most significant factor in a multivariate analysis.
The company also announced the broad clinical launch of Signatera Genome, which leverages Natera’s proven mPCR-NGS method and can detect tiny traces of tumor DNA at frequencies as low as 1 part per million.
Detailed Financial Analysis
Natera’s Q1 2025 financial results showed broad-based improvement across key metrics. The company’s total revenue of $501.8 million consisted of $500.0 million in product revenues and $1.8 million in licensing and other revenues.
The following financial overview highlights the company’s performance compared to the same period last year:
While R&D expenses increased to $129.1 million (from $88.6 million in Q1 2024) and SG&A expenses rose to $266.9 million (from $194.3 million), the company’s net loss per diluted share improved to ($0.50) from ($0.56) a year earlier. Natera ended the quarter with $991.6 million in cash and investments, up from $968.3 million at the end of 2024.
The company’s gross margin improvement has been consistent over the past two years, as shown in the following chart:
Revised 2025 Outlook
Based on the strong Q1 performance, Natera raised its full-year 2025 guidance. The company now expects annual revenue between $1.94 billion and $2.02 billion, up from its previous guidance of $1.87 billion to $1.95 billion. This represents approximately 26% pro-forma revenue growth at the midpoint.
The updated guidance reflects continued volume growth, conservative ASP assumptions, and strong oncology contribution. The company maintained its gross margin guidance of 60-64% while increasing its expected spending on both SG&A and R&D to support growth initiatives.
The following table details Natera’s updated 2025 guidance:
Natera continues to expect positive cash flow for the full year 2025, with plans to reinvest cash flows into operations to drive future growth. The company’s increased R&D guidance reflects accelerating clinical trials and product investments, particularly in expanding the clinical utility of its Signatera and Prospera test portfolios.
With its strong Q1 performance and raised guidance, Natera appears well-positioned to maintain its growth trajectory throughout 2025, driven by expanding clinical adoption of its precision diagnostics portfolio and continued operational improvements.
Full presentation:
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