Earnings call transcript: Guardant Health beats Q2 2025 forecasts, shares rise

Guardant Health Inc. (GH) reported better-than-expected earnings for the second quarter of 2025, with a significant improvement in both revenue and earnings per share (EPS) compared to forecasts. The company posted an EPS of -$0.44, surpassing the anticipated -$0.72, marking a surprise of 38.89%. Revenue reached $232.1 million, exceeding expectations of $211.27 million, resulting in a 9.86% revenue surprise. Following the earnings announcement, Guardant Health’s stock rose by 4.32% during after-hours trading, reflecting investor optimism. According to InvestingPro analysis, the company currently appears overvalued based on its Fair Value assessment, with a "FAIR" overall financial health rating of 2.25 out of 5.

Key Takeaways

• Guardant Health’s Q2 2025 revenue grew by 31% year-over-year.
• EPS significantly outperformed expectations with a 38.89% surprise.
• Stock price increased by 4.32% in after-hours trading.
• The company launched 11 new smart liquid biopsy applications.
• Full-year revenue guidance was raised to $915-$925 million.

Company Performance

Guardant Health demonstrated robust performance in Q2 2025, with total revenue increasing by 31% year-over-year to $232.1 million. The company saw growth across its key segments, with oncology revenue rising 22% and biopharma and data business revenue up by 28%. The Shield screening revenue also contributed significantly, reaching $14.8 million. This performance underscores Guardant Health’s continued expansion in the comprehensive genomic profiling market and its leadership in minimal residual disease testing. InvestingPro data shows the company maintains strong revenue momentum with a 28.2% growth rate over the last twelve months and impressive 28% CAGR over the past five years.

Financial Highlights

• Revenue: $232.1 million, up 31% year-over-year
• Earnings per share: -$0.44, better than the forecasted -$0.72
• Non-GAAP gross margin: Improved to 66% from 60% in 2024
• Adjusted EBITDA loss: Reduced to $51.9 million from $61.9 million in Q2 2024
• Cash and equivalents: $735 million at quarter-end

Earnings vs. Forecast

Guardant Health’s Q2 2025 results exceeded expectations, with an EPS of -$0.44 compared to the forecast of -$0.72, representing a surprise of 38.89%. Revenue also surpassed the forecast of $211.27 million, achieving a 9.86% surprise. This positive performance marks a significant improvement over previous quarters, highlighting the company’s ability to deliver beyond market expectations.

Market Reaction

Following the earnings announcement, Guardant Health’s stock increased by 4.32% in after-hours trading, closing at $43.32. This rise reflects investor confidence in the company’s strong financial performance and favorable outlook. The stock remains within its 52-week range, with a high of $53.42 and a low of $20.14, indicating sustained investor interest. InvestingPro analysis indicates the stock is currently in oversold territory based on RSI readings, while analyst consensus remains strongly bullish with price targets reaching up to $70. For deeper insights into GH’s valuation and technical indicators, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Outlook & Guidance

Guardant Health raised its full-year 2025 revenue guidance to $915-$925 million, projecting a growth rate of 24-25%. The company anticipates oncology revenue to grow by approximately 20% year-over-year and increased its Shield revenue guidance to $55-$60 million. Guardant Health aims for cash flow breakeven by 2028 and expects a full-year free cash flow burn of $225-$235 million. The company maintains a strong liquidity position with a current ratio of 4.11, and operates with a moderate debt level, as revealed by InvestingPro data. Subscribers can access 6 additional ProTips and over 30 financial metrics for comprehensive analysis of GH’s financial health and growth prospects.

Executive Commentary

Co-CEO Helmi El Toucchi emphasized the strategic importance of Guardant Health’s innovations, stating, "We continue to see this as a beachhead for a new paradigm in oncology." CFO Mike Bell expressed confidence in the company’s financial trajectory, noting, "We remain very confident that we can get to breakeven in 2028."

Risks and Challenges

• Market competition in the genomic profiling sector
• Potential regulatory changes affecting product approvals
• Economic factors impacting healthcare spending
• Dependency on reimbursement policies for Shield platform
• Technological advancements by competitors

Q&A

During the earnings call, analysts inquired about the Sereno-6 trial’s potential for breast cancer monitoring and the commercial prospects of the Shield platform. Executives expressed confidence in the reimbursement and growth potential of Shield, as well as ongoing development efforts for the Shield V2 platform.

Full transcript - Guardant Health Inc (GH) Q2 2025:

Jayson, Moderator: Good afternoon, and thank you for attending the Guardant Health Q2 twenty twenty five Earnings Conference Call. My name is Jayson and I’ll be the moderator today. All lines will be muted during the presentation portion of the call and an opportunity for questions and answers at the end. I would now like to pass the conference over to your host, Zarek Hirshid.

Zarek Hirshid, Investor Relations, Guardant Health: Thank you. Earlier today, Guardant Health released financial results for the quarter ended 06/30/2025. Joining me today from Guardant are Helmi El Toucchi, Co CEO Amirli Talasaz, Co CEO and Mike Bell, Chief Financial Officer. Before we begin, I’d like to remind you that during this call, management will make forward looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated.

This call will also include a discussion of non GAAP financial measures, which are adjusted to exclude certain specified items. Additional information regarding material risks and uncertainties as well as the non GAAP financial reconciliation to most directly comparable GAAP financial measures are available in the press release Guardant issued today as well as in our 10 ks and other filings with the SEC. Guardant disclaims any intention or obligation to update or revise financial projections and forward looking statements, whether because of new information, future events or otherwise, except as required by law. The information in this conference call is accurate only as of the live broadcast. With that, I would like to turn the live call over to Helmy.

Helmi El Toucchi, Co-CEO, Guardant Health: Thanks, Eric. Good afternoon and thank you for joining our second quarter twenty twenty five earnings call. Starting on Slide three. Q2 marked another exceptional quarter for Guardant. We continue to build the momentum across oncology, biopharma and screening business lines, including accelerating therapy selection and MRD volume growth, record biopharma sales and quickly scaling Shield volumes and revenues.

Product innovation built in smart liquid biopsy combined with strong commercial execution were integral to the strong performance in the second quarter. I’ll walk through some of the key highlights of the quarter in just a moment. But first as always, I would like to start with a powerful story that demonstrates the impact our tests can have on patients around the world. Last August, a 46 year old woman was diagnosed with stage three endometrial carcinoma. Once it became clear that her cancer was progressing, her oncologist ordered a Guardant360 tissue test to help identify potential treatment options beyond the standard of care.

Guardant360 tissue had just gone through a major upgrade to incorporate comprehensive DNA and RNA and oncologist ordered both results. The test identified a RET fusion, an actionable biomarker that made her eligible for a targeted therapy she likely would not have received based on her initial diagnosis alone. I’m glad to be able to share that she has responded positively to this treatment and is doing well today. This case is a powerful example of how comprehensive molecular profiling through our recently upgraded Guardant360 tissue test can help guide treatment decisions and improve patient outcomes. Turning to top line performance on Slide four, Q2 revenue grew 31% year over year to $232,000,000 with strong performance across our oncology screening and biopharma and data businesses.

Starting with our oncology business on Slide five, roughly half of the overall year over year revenue growth in Q2 came from the oncology business with revenue increasing 22% to $159,000,000 Oncology volumes increased 30% year over year to approximately 64,000 tests in the second quarter with the majority of growth driven by Guardant360 Liquid again closely followed by a strong contribution from Reveal. Looking more closely at some of the recent highlights within our oncology business on Slide six, we saw continued volume growth across all oncology tests this quarter with particularly strong performance from Guardant360 Liquid where year over year growth accelerated for the fourth consecutive quarter and was over 20% in Q2. We continue to believe that the steady cadence of new app introductions powered by smart liquid biopsy has been instrumental to the accelerating growth profile of Guardant360 Liquid. In late May as part of the lead up to ASCO twenty twenty five, we introduced 11 groundbreaking smart liquid biopsy applications for Guardant360 Liquid significantly expanding the clinical utility and further extending our technical leadership in the liquid CGP market. I’ll walk through some of these applications in more detail shortly.

Guardant360 tissue continues to be our second fastest growing oncology product and is even better positioned today to accelerate following the major upgrade in April, which we believe make it a best in class product. As a reminder, the recent improvements expand the panel to include RNA and broad methylome analysis powered by our smart liquid biopsy platform and enable readouts with 40% less slides than the industry norm, which we believe is an important differentiator. We are also excited to report for the first time that Guardant360 tissue ASP was approximately $2,000 in Q2 achieving our 2028 target three years ahead of schedule. For REVEAL, we made great progress with data generation and publications. We recently submitted our REVEAL breast cancer data package to MolDx for Medicare reimbursement and the first publication of immuno oncology therapy monitoring data under a bill was published this week.

In May, we continue to augment our offering with the launches of GARDEN hereditary cancer testing and a suite of immunohistochemistry or IHC tests. These additions bring us closer to becoming a one stop shop for oncologists providing insights across the patient journey. Turning to Slide seven, at the annual ASCO meeting in early June results from the landmark SERENO-six trial are sponsored by AstraZeneca were featured in a high profile plenary session. This was the first pivotal trial to use a ctDNA guided approach to detect and treat emerging resistance in first line therapy ahead of disease progression in breast cancer. Guardant360 was exclusive companion liquid biopsy used in the trial for this monitoring application.

Feedback from KOLs during and after ASCO was incredibly positive and we look forward to chemazestrant potentially becoming a new option for breast cancer patients. This important new paradigm involving frequent Guardant360 testing in order to quickly detect the emergence of resistance mutations has potential to change clinical practice and improve outcomes for patients with advanced breast cancer. With a prevalence pool of approximately forty thousand patients in The U. S. This new application of Guardant360 has the potential to drive significant incremental Guardant360 revenue in 2026 and beyond.

Moving on to Slide eight, we have built a powerful real world evidence platform utilizing over 100,000 genomic and broad epigenomic profiles across more than 50 cancer types. By combining the multi omic profiling capabilities platform with the analytical power of our null AI learning engine, we are driving the development of first of their kind clinical applications that are setting a new standard in precision oncology. Turning to Slide nine, since July, Guardant360 has delivered accelerating growth each quarter fueled by our Guardant null Smart liquid biopsy platform. In Q2 alone, we launched nearly a dozen groundbreaking new apps, greatly expanding the utility of Guardant360 liquid. The latest wave of new apps include complementary genomic features which add an even higher resolution view of tumor biology helping healthcare providers to make smarter, more personalized treatment decisions even when tissue isn’t available for analysis.

Among the many newly launched applications are cancer subtype classification using tumor specific methylation signatures to complement enhanced standard testing methods, cancer site of origin identification when the primary site is unknown guiding better diagnosis and therapy. Advanced negative prediction to confidently identify wild type patients and pharmacogenomic profiling to identify genetic variations that impact the safety and efficacy of commonly used anticancer therapies. Now shifting gears to REVEAL on Slide 10, where we are the leader in tissue free MRD. Over the last few months we have continued to generate and publish compelling data on REVEAL across a number of cancer types. As I mentioned earlier, the REVEAL breast reimbursement submission has been made to MolDx and the IO monitoring study just published will support reimbursement submission for this application in the near future.

Starting with Slide 11, we were excited to announce a new breast cancer publication in ESMO Open highlighting the performance of Reveal. This retrospective study evaluated ninety five patients who were diagnosed with early stage ER positive HER2 negative or triple negative breast cancer undergoing chemotherapy prior to surgery. Notably, nearly forty percent of patients had minimal or no residual tumor following neoadjuvant chemotherapy demonstrating the value of Reveal’s tissue free approach. Reveal showed strong performance with 100% sensitivity for distance recurrence in patients with ER positive HER2 negative breast cancer, 100% specificity and 100% positive predictive value for relapse and an overall sensitivity of seventy one percent. These results combined with the data recently published in clinical cancer research further validate Reveal’s potential to transform neoadjuvant and post treatment surveillance strategies with the ultimate goal of improving patient outcomes.

Moving on to slide 12, I am proud to share the Radiohead Reveal immuno oncology monitoring study which involved five twenty one stage four pan cancer patients treated with standard of care immunotherapy was published in Cancer Research Communications, a journal of the American Association of Cancer Research. This study demonstrated that any decrease in Reveal tumor fraction signal in this study was significantly associated with improved patient outcomes. Additionally, REVEAL identified non responders more than three months and as many as five months before disease progression was visible in standard imaging. Turning to Slide 13, at this year’s ASCO annual meeting data from the largest study to date using ctDNA in stage three colon cancer further validated the clinical utility of Reveal. This phase three study involved over 2,000 patients evaluated with a median follow-up of six point one years showed that ctDNA detected after surgery and before chemotherapy is a powerful predictor of recurrence and survival.

Among patients with detectable ctDNA sixty three percent experience recurrence within three years compared to just fifteen percent of those without detectable ctDNA. These findings strongly support the routine use of Guardant Reveal to stratify patients by risk, inform adjuvant therapy decisions and ultimately improve outcomes. We have made strong progress over the last few months in MRD. REVEAL volume growth accelerated in the second quarter on a year over year basis consistent with our expectations and we continue to have an extensive pipeline of clinical cohorts to further support clinical utility and analytical validity for REVEAL. Turning now to Slide 14, our oncology business is well positioned for durable growth supported by continued CGP penetration, favorable ASP dynamics and international expansion.

Guardant360 Liquid and Guardant360 Tissue are seeing increased adoption driven by the recently expanded genomic and epigenomic breadth of our platform which is unlocking greater clinical utility and driving share gains. With our redoubled commercial focus on revealed following major COGS improvements and Medicare CRC surveillance reimbursement earlier this year, the business is prime for strong growth in MRD. Looking more closely at some of the recent highlights within our biopharma and data business on Slide 15. We delivered a record quarter for our biopharma business achieving all time highs in both volume and revenue with second quarter revenue growing 28% year over year. We continue to deepen our relationship with large pharma and signed two new companion diagnostic deals in Q2.

We continue to have a robust and growing pipeline of partnerships and near term revenue visibility remains high. Of note, our biopharma volume mix continues to skew towards methylation analysis on INFINITY powered by our smart liquid biopsy platform. With that, I will now turn the call over to Amir Ali for an update on screening.

Amir Ali Talasaz, Co-CEO, Guardant Health: Thanks, Elmi. Moving on to Slide 16. We delivered $15,000,000 of Shield testing revenue in Q2 driven by approximately 16,000 tests. We are pleased to see continued strong traction for Shield in the third full quarter of commercial launch. SEAL continues to generate strong enthusiasm from both patients and physicians with high adherence rates that continue to be over ninety percent, meaning we received blood samples for more than ninety percent of ordered cases.

This demonstrates the simplicity of Shield as a routine blood test for CRC screening that can be implemented into standard PCP care. We also continue to observe strong depth of ordering per physician. Moreover, we’ve been encouraged with the momentum in sales rep productivity in the field, although it’s still early days in our commercial journey and the average tenure of our sales reps is less than eight months. Given our performance this quarter across revenue, volume and gross margin, we are further accelerating the build out of our commercial infrastructure and now expect to surpass two fifty sales reps by year end to support this growth as we go to 2026. Moving on to Slide 17.

In late May, we are very encouraged to see National Comprehensive Cancer Network, or NCCN, update its CRC screening guidelines to include SHIELD. The new NCCN guidelines place SHIELD in Category 2A, which is the same category recommendation as the other first line screening modalities. This represents the first national guideline recommendation for SHIELD and in our view paves the way for improved commercial coverage and patient access. This also supports our confidence that Shield will be included in other national CRC screening guidelines in the future. Now turning to Slide 18 to take a closer look at screening highlights for the second quarter twenty twenty five.

Starting with Shield CRC. As I mentioned earlier, we are very pleased with the high patient adherence, strong depth of ordering per physician and the productivity of our reps in the field. We are also very excited to see Shield is now a guideline recommended screening test by the NCCN. Along with this strong momentum, Spilled was recently named a winner of Fast Company’s twenty twenty five World Changing Idea Awards, an award that recognizes innovative companies and projects addressing the world’s most urgent challenges. Beyond CRC, we made meaningful progress with Shield Multi Cancer Detection, MCD, in the second quarter.

As a reminder, we presented the clinical validation of Shield MCD tests at AACR and ASCO this year. This momentum continued when Shield MCD received breakthrough device designation from the FDA, making an important milestone for us. Moving on to Slide 21. As a reminder, our goal has always been to detect cancer early when it’s most treatable. We developed our Shield assay as a platform capable of multi cancer detection with CRC screening representing just the first indication for Shield, given it has an established regulatory and reimbursement pathway.

While we are encouraged by the strong traction we are seeing for Shield CRC, we are even more excited about broadening the impact of Shield across multiple cancer types. Moving on to Slide 22. In early January, we announced Shield selection for inclusion in the National Cancer Institute’s Vanguard study, which is a 24,000 patient pilot study to evaluate the use of MCD tests. As a reminder, SCHILD was one of only two technologies selected through a highly competitive process. We are pleased to share the comments of NCI Vanguard study just a few weeks ago, and we have already started delivering MCD results to physicians and their patients through this trial.

The initiation of this study establishes the clinical and operational readiness for Shield MCD and marks an important milestone for the Shield platform. We are looking forward to broadening access to Shield MCD beyond the scope of the Vanguard study in the near future. Looking ahead, Shield V2 continues to be a very active program for us, and we remain confident about the potential inclusion of SHIELD in American Cancer Society or ACS guidelines. With that, I will now turn the call over to Mike for more detail on our financials.

Mike Bell, Chief Financial Officer, Guardant Health: Thanks, Amir Ali. Turning to Slide 23. I’ll now discuss some select financial highlights for the quarter ended 06/30/2025. I’ll refer to year over year growth rates unless otherwise noted. Second quarter total revenue grew 31% to $232,100,000 driven by strong performance across all our key revenue lines, oncology, biopharma and data and screening.

Starting with our oncology business. Oncology revenue grew 22% to $158,700,000 primarily driven by another quarter of accelerated volume growth. As a reminder, oncology volume consists of our Garnet360 liquid and tissue therapy selection tests and our Reveal and Response Monitoring tests. Oncology volume grew 30% to approximately 64,000 tests in Q2, with the majority of growth driven by Guardant360 Liquid, closely followed by strong contribution from Reveal. Guardant360 Liquid year over year volume growth accelerated for fourth consecutive quarter and was over 20% in Q2.

Reveal year over year volume growth also accelerated in Q2 and continues to be our fastest growing oncology product. We also continued to see strong oncology ASPs in Q2. Guardant360 liquid ASP was in the range of $3,000 to $3,100 in the 2025, in line with the prior quarter. Guardant360 tissue ASP increased to approximately $2,000 in Q2, which means that we have reached our 2028 tissue ASP target three years ahead of schedule. This has been driven by the increase in Medicare pricing from $3,140 to $3,500 at the start of the year, good progress with commercial players and incremental reimbursement related to the recently launched tissue RNA feature.

We’ve been very encouraged by the attachment of RNA to our Guardant360 tissue test, and we want to highlight that we do not count tissue RNA separately from Gardner three sixty tissue in our reported volumes. Reveal ASP continues to be in a range of $600 to $700 following Medicare CRC surveillance coverage earlier in the year. As of period revenue was consistent with normal expected levels in Q2 and did not provide a material upside in the quarter. Finally, note that we do not include Guardant’s hereditary cancer testing or IHC volumes in our reported volumes, and we expect minimal revenue contribution from these new offerings throughout 2025. Our biopharma and data business performed incredibly well again in the second quarter with record revenue totaling $56,000,000 an increase of 28%.

Our biopharma pipeline continues to shape up solidly, driven by Guardant Sinfinity and additional companion diagnostic partnerships signed in the quarter, all of which add to our confidence in both the short term and long term business. Finally, we continue to see increasing revenue contribution from Shield with screening revenue totaling $14,800,000 in Q2 generated from the 16,000 Shield tests that we reported in the quarter. Turning to Slide 24. We’re extremely pleased to report that we are making great progress with Shield non GAAP gross margin, which increased to 48% in Q2 compared to 18% in Q1 twenty twenty five and two percent in Q4 twenty twenty four. This was driven by continued improvement in both ASP and COGS.

Shield ASP was over 900 in Q2, which represents a significant increase over the ASP of approximately $600 in Q1. The main drivers of ASP improvement were the increase to our Medicare rate from $920 to $14.95 dollars following the receipt of ADLT status, which became effective on April 1 and the continued high mix of reimbursable test volume. It should also be noted that the Shield ASP reflects the strong reimbursement that we are receiving from Medicare Advantage payers. Equally pleasing is that Shield’s non GAAP cost per test further reduced in Q2 and is now less than $500 This continued improvement is driven by increased Shield volume and the excellent performance of our operations team in maintaining rigorous cost controls and driving efficiency gains. Similar to last quarter, we plan to reinvest the incremental Shield gross profit we generate back into the sales and marketing line to accelerate the screening commercial infrastructure build out.

We continue to be very proud of the financial profile that Shield has demonstrated in such a short period of time. Turning to Slide ’25. Our non GAAP gross profit was $153,800,000 an increase of $47,000,000 or 44% year over year. Our non GAAP gross margin of 66% was above our expectations in the 2025 and was a significant improvement compared to 60% in the 2024. The improvement in gross margin is primarily a result of improved oncology ASP as well as the significant turnaround in gross margins for REVEAL and SHIELD, which were both gross margin negative in Q2 twenty twenty four and which are now both gross margin positive.

As we noted last quarter, REVEAL cost per test has reduced from over $1,000 in 2024 to less than $500 in 2025. Non GAAP operating expenses were $215,300,000 in the 2025, an increase of 20% and in line with our expectations. Both non GAAP R and D and G and A expenses in the quarter were approximately flat compared to prior year, which reflects the operating leverage that we’re achieving throughout the business. Non GAAP sales and marketing expense increased 45% to $107,800,000 in the 2025. This increase was due to the ongoing screening commercial build out as well as continued investment in oncology sales and marketing.

Adjusted EBITDA loss was $51,900,000 for Q2 twenty twenty five, an improvement of $10,000,000 compared to a loss of $61,900,000 in Q2 twenty twenty four. We continue to be focused on cash management and reducing our burn in 2025 versus 2024. Q2 twenty twenty five free cash flow burn was $65,900,000 compared to $99,100,000 in the prior year period. We ended the quarter with approximately $735,000,000 in cash, cash equivalents and restricted cash. Moving to Slide 26 for our outlook and assumptions for the full year 2025.

We’re increasing our full year 2025 revenue guidance for the second time this year to be in the range of $915,000,000 to $925,000,000 representing growth of approximately 24% to 25% compared to 2024 and an increase of $35,000,000 compared to our prior range of $880,000,000 to $890,000,000 We now expect oncology revenue to grow approximately 20% year over year in 2025 compared to our prior guidance of 18%. The increase is based on stronger than expected Guardant360 liquid and Reveal volumes in Q2 twenty twenty five as well as higher oncology volume now projected for the remainder of the year. For the full year 2025, we now expect total oncology volume to grow greater than 27% versus our prior expectation of greater than 25%. We continue to expect our biopharma and data business to perform well throughout 2025 and now expect mid teens revenue growth compared to our prior expectation of low double digit growth. We’re also raising our full year 2025 Shield revenue guidance again this quarter to $55,000,000 to $60,000,000 from our prior guidance of 40,000,000 to $45,000,000 This increase is largely driven by higher volume, where we now expect 68,000 to 73,000 tests versus our prior guidance of 52,000 to 58,000 tests.

Our Shield revenue guidance assumes an ASP of approximately $800 for the 2025, slightly lower than our Q2 ASP as we anticipate potential changes to the mix of Medicare and commercial pay tests as we scale the business. With the significant improvements to gross margins that we’ve generated during the first half of the year, we are raising our full year non GAAP gross margin guidance to be in the range of 63 to 64% compared to the previous range of 62% to 63%. As we previously outlined, we plan to reinvest any incremental screening gross profit we generate throughout the year back into the business to accelerate our commercial infrastructure build out. As a result of improved Shield volume and gross margin, we’re increasing our sales and marketing efforts and now expect 2025 non GAAP operating expenses to be in the range of $840,000,000 to $850,000,000 representing an 11 to 12% increase compared to 2024. We continue to expect full year non GAAP R and D and G and A expenses to be relatively flat compared to 2024.

Lastly, our commitment to cash burn reduction each year in order to reach company wide cash flow breakeven in 2028 is unchanged. For full year 2025, we still expect free cash flow burn to be in the range of $225,000,000 to $235,000,000 an improvement compared to $275,000,000 for 2024. We continue to expect our cash burn in 2025 to consist of approximately $200,000,000 related to screening as we scale our Shield business and maximize our first mover advantage. Significantly, excluding screening, we continue to expect the remainder of the business to burn approximately $25,000,000 to $35,000,000 during the year and to reach free cash flow breakeven in the 2025. Moving on to Slide ’27.

At the start of the year, we outlined an ambitious pipeline of catalysts, and it’s a testament to our team’s strong execution that we’ve delivered on nearly all of them just halfway through the year. And finally, turning to Slide 28. We’ll be hosting an Investor Day on Wednesday, September 24, in New York City. We look forward to sharing a deeper dive across our business. Please reach out to investorsgardenthealth.com for more information.

With that, we’ll now open the call to questions.

Jayson, Moderator: Our first question is from Mark Massaro from BTIG. Your line is now open.

Mark Massaro, Analyst, BTIG: Hey guys, congratulations on the strong beaten raise. Helmy, the first one is for Clearly, you guys are doing a really great job in G360 liquid, and you’ve raised the volume guidance for the year. You talked about Serena six. And what I’m curious about is did you see any benefit from the New England Journal publication perhaps in Q2? And can you give us a sense for the likelihood that you can continue to drive the interval of testing in three sixty in breast cancer?

Helmi El Toucchi, Co-CEO, Guardant Health: Yeah. No. Thanks for the question, Adam. We’re happy with the quarter, obviously, and happy with the performance of our core business. I think, as we’ve said, this quarter, we saw something like over 20% growth for g three sixty, which is just fantastic, you know, to see this kind of growth, you know, product that’s been in the market for so long.

And I think what we’re seeing right now is really, I think, a testament to, you know, the product market fit we’ve achieved with our null smart liquid biopsy platform. And I think, I think there’s a lot more juice to squeeze. I don’t we’re you know, if there was a serranus six, impact, it was very minimal. This quarter, we think we’d see the majority of that once and if the drug is finally approved. And we obviously are very excited about that in terms of the potential for adding significantly more testing opportunities to the liquid biopsy space.

But I think this is really, I think, shows kind of how big the CGP liquid biopsy market is. I think we’re still in the early innings of converting users to essentially just one test to do the first test from a liquid biopsy space. But we have so much room to run, I think so many years of growth, ahead of us as we start getting this sort of monitoring paradigm really, you know, kind of fully realized by the market.

Jayson, Moderator: Our next question is from Puneet Souda with Leerink. Your line is now open.

Puneet Souda, Analyst, Leerink: Hi, guys. Thanks for the questions here and congrats on a really strong quarter. If you don’t mind, I’ll try to squeeze my questions into one. First, Shield growth is obviously very impressive. You talk a little bit about what’s driving that, AmeriLay PCPs among the PCP practices?

Is it NCCN? Is it the ramp in the sales force? And wondering if you can give sort of an ASP number. It seems to be higher than the 800 that you had projected. So wondering where that’s going to land.

And around Shield, if I may also ask, Shield V2 is a big focus for investors. We were hoping for a data by now. Any updates on that data? And I’ll pause there. I have more questions, but I’ll follow-up with tell me later.

Amir Ali Talasaz, Co-CEO, Guardant Health: Okay. Thanks, Raj, for good questions. So, you know, we are very excited with the Shield commercial performance. You know, we are continuing to see a very strong pull by market. You know, when physicians are becoming aware of this test and they’re getting access to this test as we are scaling up our, footprint in the field in terms of reps, we are seeing a very strong demand.

And I think this beat and raise is really, an endorsement of a higher productivity that we are seeing in this newly formed sales team that we have kind of assembled, and we are very excited about it. I’m looking forward to see what we can do in second half of the year. Maybe I go to ShieldV two, and then I give it to Mike to talk about the ASP. Yeah. As I mentioned in the prepared remarks, v two is a very active program for us.

A lot of work has gone into it, and still it’s ongoing. And we’ll see what happens. Mike?

Mike Bell, Chief Financial Officer, Guardant Health: Yeah. And yes. I I can add on the on the ASP. So we saw a really good uplift in Shield ASP in in the quarter. We went from in q one.

ASP was just over $600 and in Q2, that increased to over $900 And the main driver there, obviously, was that the ADLT status became effective on the April 1. So our Medicare rate increased from nine twenty to fourteen ninety five. And we’re also seeing very strong Medicare Advantage reimbursement that’s coming through now from pretty much all of the payers. And so that’s helping to really stabilize that ASP. I think when we look at the back half of the year, and we said it in the prepared remarks, we’d expect our ASP for the next six months to be around $800 And so that would be slightly lower than Q2.

And really, that’s a function of the mix. As we continue to scale, we think we’ll see more of the mix move from Medicare, Medicare Advantage onto commercial. So we’re just allowing for that over the next six months. But, yeah, I think ASP story on Shield has been really positive for us this quarter.

Jayson, Moderator: Our next question is from Dan Brennan with TD Cowen. Your line is now open.

Dan Brennan, Analyst, TD Cowen: Great. Thank you. Thanks for the question. Maybe just one on G360 since doing so well and it’s your biggest business. Just could you give a little color in terms of kind of where the growth is coming from?

Do you feel that you’re seeing better penetration maybe locally or big AMCs? Do you feel like it’s more just penetration of the existing market? Or do you feel like maybe you’re taking share? And then the other factor is, Helmy, you discussed a lot of the benefits of smart liquid biopsy in terms of the performance. Is that resonating at the oncologist level?

Is that really a sale into the hospital administrator? Just to unpack a little bit your growth versus maybe the other players in the broader market.

Helmi El Toucchi, Co-CEO, Guardant Health: Yeah. No. That’s a great question. When we when we dissect the the numbers, it really is a broad based growth. We’re seeing, more oncologists, than ever before ordering every single month.

So that continues to grow pretty dramatically over the last few quarters since we launched smart liquid biopsy. We’re seeing higher deaths. So in those same accounts, we’re seeing a much higher average of number of three sixty tests per month. And so that’s really exciting. So we know that it’s coming from just the increased utilization of the tests.

We’re growing, you know, the sort of market and use cases of liquid biopsy. But also significant share gains as well, which is great to see. And I think as I alluded to before, we have a test that truly has achieved much greater product market fit than anything out there. And when we talk about these features, these features are really resonating at the oncologist level. I was at ASCO.

I can tell you that many of the key opinion leaders we work with, many academic center oncologists are really, really excited about these features. But these features resonate at the community level as well. The fact that we can do what sometimes tissue can’t, the fact that we can see how the tumor is evolving from a subtype point of view, which has serious implications in terms of treatment decisions. We can see those patients who may qualify for certain drugs that many other tests out there can, from immunotherapies to PARP inhibitors. And this is just the beginning in terms of what we’re able to do.

I can tell you the pipeline we have of new applications and new apps that we’re gonna launch over the coming quarters is probably even more exciting than what we’ve launched today. So there’s many things, I think, if I told you we could do three years ago, most oncologists, most scientists would have said it’s science fiction. And that is really, I think, the power of this platform in terms of what we can do. And you’re starting to see it in the numbers on both the biopharma side and now the clinical side.

Jayson, Moderator: Our next question is from Tycho Peterson with Jefferies. Your line is now open.

Tycho Peterson, Analyst, Jefferies: Hey. Thanks. On Shield, you know, congrats on the Vanguard enrollment. I just wondering if you can walk through kind of next steps to getting Shield marketed, you know, as an M SEAD test. Do you have to wait for data from the ongoing lung study or an interim Vanguard readout?

How do you, you know, feel That seems to be a bit of a debate in the investment community. And then can you maybe just talk to your view on the risk around USPSTF? Obviously, you know, if the whole panel gets replaced, that could throw a

Zarek Hirshid, Investor Relations, Guardant Health0: monkey wrench in things. Thanks.

Amir Ali Talasaz, Co-CEO, Guardant Health: Yeah. So the tackle, we are very excited with this, progress we had on r and d side. Now MSAD is clinically validated. Since clinically validated, we are not waiting for any other test or test to be a clinical grade test. It’s we spent some energy and effort to make it operationally ready for patient testing.

And, you know, now that we are started, the Vanguard study, you know, lab are running these samples. We are reporting out these clinical reports for patient management within the Vanguard. So from those aspects, we are actually ready. It’s not that we are waiting for any kind of pivotal study readout to come before we take any action on broadening access for shield m set. As I mentioned in the prepared remarks, hopefully, we can have some conversation about it in near future and stay tuned about it.

In terms of some of the, I think, the matters you mentioned, we are very well of the laws. We are here to help the patients. You know? Whenever we are gonna do something which is against the laws. And I think the way I read about it is the tremendous opportunity that we have with Shield that excites us.

I think just over time would increase. USPS, yeah, very quickly, we are monitoring the situation very closely. Yes. Looks like the whole panel appears to be to get into the process to get replaced. The good success that we had with our shield in the market right now with a very healthy gross margin and a very Big Greenfield, which is in front of us.

We had a lot of, actually, opportunity in front of us to mine, build this business while we are waiting for task force task force guideline inclusion.

Jayson, Moderator: Our next question is from Subbu Nambi with Guggenheim. Your line is now open.

Zarek Hirshid, Investor Relations, Guardant Health0: Hey, guys. Thank you for taking my question. You had recently said that ReDeal was at approximately 1.7 tests per patient. How much do you expect the CRC surveillance reimbursement to drive this number upwards in the near term in 2026? And then in the long run, what do you think this number could look like?

And I noticed in the catalyst slide, you don’t have reveal ADLT listed. I don’t think that was on the slide before, but I’m curious if you have any updates there. Thank you.

Helmi El Toucchi, Co-CEO, Guardant Health: Yeah. No. Good questions. You know, we’re already seeing it, drive drive higher, with some of the progress we’ve made. We’ve seen not only, great traction.

As we’ve said, Reveal is our fastest growing product on the oncology side. It’s really only second to shield across the company. And so we’re really excited about the progress we’ve made. We’re seeing acceleration there. Really good traction with new patient starts, but even more so with subsequent draws, which is where we hadn’t been pushing quite as much.

Now that we’ve turned a lot of that machinery on, a really, you know, really sort of it’s been exciting to see how much we can start to lean into that and and really drive that that volume. So, yeah, I mean, I think next few quarters and certainly into ’26, we have high expectations for REVEAL, and we can certainly get that number, I think, up significantly in terms of number of tests per patient. In terms of ADLT, you know, there was never a milestone chart there, but it’s certainly something we’ve submitted for, and we are waiting for a decision, basically. Hopefully, over the next quarter or so, we’ll we’ll know the resolution. I think we’re, you know, I think we’re, very positive.

We we know that, you know, the test qualifies for ADLT. So, you know, hopefully, it’ll come back as a positive.

Jayson, Moderator: Our next question is from Kyle Mixon with Canaccord. Your line is now open.

Mark Massaro, Analyst, BTIG: Hey, guys. Thanks for the questions. Congrats on a great quarter. Help me, why are you confident that Reveal Medicare reimbursement for breast is going to be obtained faster than TRC including surveillance for colon that took a while? And then second for Amirli, NTC inclusion was nice, but is that having an impact on Shield volumes?

Or do

Mike Bell, Chief Financial Officer, Guardant Health: we need ACS and USCSTF?

Mark Massaro, Analyst, BTIG: And then on the point of USCSTF from earlier, if the panel is replaced with people that clinicians don’t really trust, is this going to make that milestone for you guys maybe less important?

Helmi El Toucchi, Co-CEO, Guardant Health: A Of questions. So the, in terms of Reveal Medicare coverage, you know, the the second time we got for CRC surveillance was actually pretty quick. I think it was just, you know, I think something like four, five, you know, months, which, you know, as fast as it really comes and from submission to, to sort of coverage. So yeah.

I mean, obviously, the the first time we we went through the process, it took a little bit longer. Second time, much, much faster. So I think, we have a better sense for, what is required from a Medicare point of view. Obviously, it’s always up to their discretion in terms of, what passes the bar or not. But, clearly, having gone through the process multiple times now, we have a better sense of what is required.

And so, yeah, we have pretty high confidence around press. We have a good confidence around IO in terms of, you know, when we finally submit that to to Multiex. And and we’re making good progress on other cohorts as well, with their deals. So it’s, it’s an exciting pipeline for us.

Amir Ali Talasaz, Co-CEO, Guardant Health: Regarding NCCN guideline, you know, definitely, it was a a surprise great milestone for us. You know, how much of it is impacting our volume, like, within this very strong ramp that we are experiencing? It’s very hard for us to kind of, you know, start out the impact of each one of these kind of catalysts for us. But NCCN, again, is the voice of expert oncologist at the end. So we are very excited with it, and we’re also continuing to be very confident about inclusion by other guidelines, including ACS and USPSTF.

I think some of this stuff is just common sense. You detect almost all stage two and above CRCs. You can cure or have very long term survival even if you detect CRC at stage two. Do you want patient to be unscreened and, you know, do not detect their cancer? I think some of this stuff is just common sense.

But over time, we are gonna figure it out. But and we we were very confident, and we remain very confident about guideline inclusion.

Jayson, Moderator: Our next question is from Dan Arias with Stifel. Your line is now open.

Amir Ali Talasaz, Co-CEO, Guardant Health: Afternoon, guys. Thank you. Amir Lee, you were sufficiently vague on that answer to V2 data timing. Is is everything squared away on your end, and it’s just a matter of when you decide to pull back the curtain on the results, or

Mark Massaro, Analyst, BTIG: are there still things that are being worked on there?

Amir Ali Talasaz, Co-CEO, Guardant Health: Sorry to ask again, but hot topic to say the least. No problem. I understand. So you’re not putting a fine point on the exact timing of the v two data, but, you know, as I mentioned, it’s it’s very active program. A lot of work has gone into it.

It’s a lot of work is going into it as we speak, and we’ll see. Like, you know, on the other side, we we do not feel rushed to get to this, and some of it is really because of commercial success we are seeing to be by the currently approved products that we want. It got gives us opportunity to balance some of our r and d initiatives. Like, you know, we pulled forward this MCET clinical validation, bringing the lab and operation up for patient reporting, which can open up opportunities for us in near future down the road. And, we’ll see when we can wrap up this b two.

Still, we are working on it.

Jayson, Moderator: Our next question is from Patrick Donnelly with Citi. Your line is now open.

Zarek Hirshid, Investor Relations, Guardant Health1: Hey, guys. Thanks for taking the questions. Maybe one just on the profitability side. Nice to see the gross margins continue to creep higher with the profitability side. As you guys have advertised in the last couple of quarters, you’re going to continue to invest that on the sales and marketing side.

I mean, Mike, does that speak to just your confidence in the path to real profitability here in the out years, the fact that you are willing to continue to reinvest rather than chase near term profitability? Can you just talk about the confidence in the balance sheet and, again, that path to profitability as you reinvest some of these, profit dollars? Thanks.

Mike Bell, Chief Financial Officer, Guardant Health: Yeah, Patrick. I mean, I think I think at a high level, know, at our last Investor Day two years ago, we set this path to profitability of 2028, and we said from from then 2023, you know, we would be reducing our cash burn every year. And so, So far, we’re well on track with that. Things are going very well. And we remain very confident that we can get to breakeven in 2028.

On the screening side, we sort of repeatedly said over the next couple of years, we’ll manage the burn to something like $200,000,000 and we’ll be very thoughtful about reinvesting any additional gross profit back into the sales and marketing line. And I think we’re ahead of track there. Gross profit, very strongly in Q2. It’s 48% gross margins. And so we’re reinvesting that, but that’s not increasing our overall burn of the target that we

Helmi El Toucchi, Co-CEO, Guardant Health: set at the start of

Mike Bell, Chief Financial Officer, Guardant Health: the year. And so I think we’re managing that very well. And it’s giving us this $200,000,000 burn is giving us everything that we need to really scale that commercial infrastructure as quickly as we can. And if you exclude screening, actually, we’re making fantastic progress. We said earlier on in the year that excluding screening, the rest of the business is on track to be breakeven before the end of the year, And that’s still the case.

And I think with the traction that we continue to see on ASPs, better than expected gross margins, we feel really confident on that. So I think from a balance sheet perspective, after profitability, yes, we’re still confident and on track to what we stated in the past.

Jayson, Moderator: Our next question is from Rachel Vazdaal with JPMorgan. Your line is now open.

Zarek Hirshid, Investor Relations, Guardant Health2: Perfect. Good afternoon. Thanks so much for taking the questions. I wanted to press on Shield V2 a little bit more, but more so around the timelines associated with it. So you previously had talked about hoping to get that launched by year end, not really committing to timelines in terms of when we’ll see that data.

But just given we don’t have it yet, can you walk us through your updated assumptions on how long do you think it will take for FDA to review once they do have the data? And are you still on track to launch that by year end at this point?

Amir Ali Talasaz, Co-CEO, Guardant Health: Yeah. So I’m not sure how much I I can add. But in terms of, yeah, the timelines for FDA approval and launch, obviously, it’s a function of when we get to the readouts and how long it would take FDA to review our package. So we’re pleased with bunch of conversation we had with agency in terms of what they’re gonna look at and how they’re gonna look at now. How long it’s gonna take to go through that review process?

We have to see how long their process would take. But, yeah, but maybe in terms of end of the year, maybe that’s fair. Maybe we are delayed a little bit, but, you know, as I mentioned, I I don’t feel rushed to get to that milestone. And, you know, it was important for us to balance some of our r and d activities between v two and MCET, and I’m very pleased with where we are today. And we are working on it very extensively.

A lot of work is happening. So but maybe it’s a little bit delayed. Yeah.

Jayson, Moderator: Our next question is from Eve Bernstein with Bernstein Research. Your line is now open.

Zarek Hirshid, Investor Relations, Guardant Health3: Great. Thanks so much for taking the questions. A couple on Shield. So now that Shield has had ADLT status for four months, you’re through a chunk of the time that you have to get private payers to contract with you. So first, can you give us some color on how those conversations are progressing?

I imagine that many private payers don’t want to reimburse a test that won’t get them quality credit yet. So how are you handling that? Second, do you expect a contract with private payers at or close to the ADLT rate? Or is the, you know, nine twenty rate more reasonable, or do you expect it to be below that? And then third, you’ve given us a guide to ASP of $800 for the rest of the year.

But how should we think about what happens to ASP next year? Could it actually decrease pretty meaningfully as that rate resets and as the payer mix shifts up a bit?

Amir Ali Talasaz, Co-CEO, Guardant Health: Yes. In terms of conversation with private payers, we’ve been in touch with them. And, you know, even after NCCN guideline, we’ve been in touch with a a fraction of commercial peers that we think maybe they would be early adopter. We’ll see what happens. We are not counting on any major coverage before getting into ACS and USPSTF guidelines, so we’ll see how it goes.

In terms of expectation for ADLT rate, based on the collections that we are having from Medicare Advantage, we are very confident of keeping our ADLT as what it is today as we go to the next reporting cycle, which is gonna start from January ’26 till December ’27. So that 1495, we are very confident it would remain the same. In terms of ASP, I think it’s gonna be a function of the payer mix. I think still we are in the early innings of this commercial execution. We are pleased with how the payer mix is landing at this time, but we are gonna monitor it, and then we would set expectation for ASP as we get closer to 2026.

Jayson, Moderator: Our next question is from Bill Bonello with Craig Hallum. Your line is now open.

Zarek Hirshid, Investor Relations, Guardant Health4: Hey, guys. Thanks a lot for taking the question. I guess this one is for Helmy. Maybe more big picture, you’re thinking about the traction that you’ve gotten with, you know, Garden three sixty Liquid and the paradigm shift from years ago sort of tissue first to the big ramp you’ve had and the evolution towards people being willing to consider Liquid first or you know, looking at at doing both. I’m just kinda curious how you might extrapolate that experience, to Reveal and, you know, sort of this this notion that seems to be out there that, gosh, you know, there’s some superiority to tumor informed and, you know, like, you know, tissue or tumor naive is fine if if you can’t get a tissue, but otherwise you want to do tumor informed.

You see sort of a similar evolution? Are you hearing anything from physicians, KOLs in particular now that leads you to believe that will happen?

Helmi El Toucchi, Co-CEO, Guardant Health: Yeah. No, that’s a great question. I think that maybe one of the sort of underappreciated aspects of our, null platform, the sort of smart liquid biopsy ecosystem, is that many of these apps that we’re populating on three sixty Liquid, will eventually make their way to three sixty Tissue and even Reveal where appropriate. And so when you think of, you know, where a reveal could be, it’s gonna look like a very different sort of product than any tumor informed product out there that is just looking for sort of, you know, passenger mutations or, you know, for a of mutations that may not be actionable. And we’re actually seeing the biology that is there in that individual, things like, the subtype, how that’s evolving, potentially even toxicity from some of the adjuvant therapy that they’re being exposed to.

It really opens up a different space, which is why we’ve said that the MRD market will likely have two aspects to it. There’ll be a tumor informed sort of market that some physicians would like to use. And there’s going to be, I think, a pretty massive issue free aspect to it in market two. Just like there is in comprehensive genomic profiling, there’s two big markets there. And I would argue that the liquid market in CGP, I think few would argue, is ultimately gonna be massively bigger than than the tissue market.

And we potentially see the same dynamic shaping up on the MRD side.

Jayson, Moderator: Our next question is from Yoko Oku with Morgan Stanley. Your line is now open.

Zarek Hirshid, Investor Relations, Guardant Health5: Hello. Thank you for taking my question. The recent SERENO-six readout provides a compelling argument to monitor emergence of ESR mutation for treatment with camisestrant. What do you think may be the split at steady state to monitor emergence of ESR1 mutation between comprehensive panel like g three sixty versus hotspot tests? And also with with cuts to Medicaid, what is your view on the impact to cancer testing more broadly?

Helmi El Toucchi, Co-CEO, Guardant Health: Yeah. So we really see this as a beachhead for, a new paradigm in, essentially oncology that will ultimately be the paradigm that I think all patients are, monitored and and treated with. And And the point is, ESR1 is the first of what we think will be many opportunities to switch therapies dynamically. Really this idea of adaptive management of disease. And the chemisestrant example, we are the enrolling assay.

We will be, if it gets approved, the official CD expert for that, at least in The United States. And and so, you know, I think we have a very good chance of not only opening the door in this new paradigm, but capitalizing on the majority of the opportunity and volume that would be there in the first couple of years. So we see it as, I think, a very significant upside opportunity on G360 volumes in the future.

Zarek Hirshid, Investor Relations, Guardant Health: One more question, please, operator.

Jayson, Moderator: Our last question is from Luke Sergott with Barclays. Your line is now open.

Amir Ali Talasaz, Co-CEO, Guardant Health: This is Salem Salem on for Luke. Thanks for squeezing us in here. Just kind of piggybacking off of question before, I guess, on Medicaid. Could you give us an update on what your exposure is to those volumes, if possible, by test, which I realize is a tall order and if not, kind of ballpark numbers just given the expected fallout of the big beautiful bill? And what do you kind of expect on pacing of any potential headwinds this year or next year?

Thank you.

Mike Bell, Chief Financial Officer, Guardant Health: Yes. I can take that one. I mean, very simply, Medicaid volume is very, very minimal in our overall volume across all products and even less so on the revenue side. So any impact overall to Medicaid isn’t really going have any impact on our overall volume or revenue.

Jayson, Moderator: That concludes the conference call. Thank you for your participation. Enjoy the rest of your

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