Guardant Health, Inc.

Hello, everybody, and welcome to the Garden Health Q1 2025 earnings call. My name is Elliot, and I'll be your coordinator today. If you would like to register a question during today's event, please press star 1 on your telephone keypad. I would now like to hand over to Zarik Khurshid, Vice President of Investor Relations. Please go ahead.

Zarik Khurshid Thank you. Earlier today, Garden Health released financial results for the quarter ended March 31, 20, 25, joining me today from gardens are co CEO, America's 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 GARDEN issued today, as well as in our 10-K and other filings with the SEC. GARDEN 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 call over to Helmy.

Thanks, Derek. Good afternoon, and thank you for joining our first quarter 2025 earnings call. Starting on slide three, we started the year with strong momentum across our portfolio. fueled by groundbreaking product upgrades introduced in 2024, which leverage our smart liquid biopsy platform, as well as the launch of SHIELD. We continue to successfully execute on our long-term vision to support patients throughout their entire cancer journey, from early detection, monitoring of recurrence, to treatment selection. By delivering critical insights at every stage of cancer care, we empower clinicians to deliver timely, actionable insights that make a meaningful difference in the lives of patients and their families around the world. As we do each quarter, I would like to start our call today by sharing a powerful story that captures the real-world impact of our garden reveal test and the difference it can make in the lives of those we serve. In September of 2022, a 55-year-old woman was diagnosed with breast cancer and later identified as having a pathogenic BRCA1 variant. She was prescribed neoadjuvant chemotherapy to help shrink the tumor prior to surgery, and a few months later, the cancer was removed successfully. In order to monitor for potential recurrence, her oncologist ordered an initial reveal test shortly after surgery, and six subsequent reveal tests have been performed over the last two years at three- to six-month intervals. All six reveal tests have returned negative results, and today the patient is enjoying life with the peace of mind that she remains cancer-free. Turning to top-line performance in slide four, we had an excellent start to the year with Q1 revenue growing 21% year-over-year to $203 million. As we discussed last quarter, we are now reporting revenue in a way that more closely aligns with how we run the business, and we believe this new reporting structure will help investors and analysts better understand our rapidly evolving business. The four revenue lines are oncology, which represents clinical therapy selection and MRD testing revenue, biopharma and data, which represents the revenue we generate from our biopharma customers from sample testing, companion diagnostic collaborations, and data services, screening, which represents shield testing revenue, and finally, licensing and other. starting with oncology business in slide five. Q1 represented another quarter of strong oncology performance, with revenue increasing 20% year-over-year to $151 million. Oncology volumes increased 25% year-over-year to approximately 59,000 tests in the first quarter, with the majority of growth driven by GARDEN360, closely followed by strong contribution from Reveal. Looking more closely at some of the recent highlights within our oncology business on slide six, we experienced continued volume growth across all oncology tests with notable strength from GARDEN360 volume, which accelerated again in the quarter following the major product upgrades leveraging the smart liquid biopsy platform last year. In addition to the strengthening product portfolio across both liquid and tissue, we continue to invest in EMR integrations which are helping to improve depth of ordering per account. I'm pleased to share that Garden 360 ASP improved again this quarter to the range of $3,000 to $3,100, driven by continued improvement in Medicare Advantage and commercial reimbursement. As a reminder, tissue Medicare pricing increased from $3,140 to $3,500 at the start of the year, and we received Medicare coverage for reveal in the zero student surveillance setting in January. This reimbursement win-for-reveal allows us to more aggressively invest in commercial efforts supporting the test, resulting in greater accessibility for patients and enabling oncologists to make more informed therapeutic decisions. In the first quarter, Reveal was gross margin positive for the first time, driven predominantly by the 50% COGS improvement we achieved exiting 2024. We continue to believe this positive gross margin inflection Along with CRC surveillance reimbursement announced in the quarter will allow us to unlock volume acceleration while meaningfully improving cash burn. Moving on to slide seven. Now I would like to highlight some of our Infinity Smart Liquid Biopsy application development work in greater depth. We have been quietly developing powerful real-world evidence platform utilizing the nearly 100,000 broad genomic and epigenomic profiles spanning more than 50 cancer types that we have assembled. Moreover, most of these profiles have been combined with rich clinical data and when analyzed with our Infinity AI learning engine, have enabled the development of the groundbreaking clinical applications we have launched and are continuing to launch this year. Specifically, a significant number of the 18 abstracts we are presenting at AACR are highlighting some of these new applications which enable features such as tumor burden quantitation, tumor subtyping, chip annotation, HRD detection, immunotherapy prediction, and many, many more to come. We believe these applications will soon set a new standard of care in oncology. Moving on to slide eight, we are pleased to announce that we have launched our upgraded tissue test, which is called GARDEN360 Tissue. GARDEN360 Tissue represents what we believe to be the first of its kind broad multi-homic tissue CGP test to incorporate comprehensive DNA, RNA, AI-powered PD-L1, and broad methylome analysis. This marks the final major product in the oncology portfolio to be upgraded to the Infinity Smart Liquid Biopsy Platform. which will enable our tissue product to leverage and accrue many of the groundbreaking epigenomic-powered features we are launching on GARDEN360 Liquid. In this way, all of our products spanning our liquid and tissue portfolio will work together synergistically to provide a differentiated physician and patient experience across therapy selection and MRD in pursuit of improved clinical outcomes. Finally, since GARDEN360 Tissue is built from the ground up utilizing our smart liquid biopsy platform, it can provide results with 40% less tissue required than most of our key competitors, enabling some of the lowest industry-wide sample requirements for next-generation sequencing. We are excited for this next generation of tissue CGP. Now shifting gears to reveal on slide 9, where we are the leader in tissue-free MRD. We are excited to announce a new breast cancer publication, clinical cancer research, highlighting the performance of garden reveal. Importantly, this is the first publication utilizing reveal in our smart liquid biopsy platform with early stage, stage 2, 3, triple negative breast cancer patients. This retrospective study evaluated triple negative breast cancer patients who were undergoing new adjuvant chemotherapy with 83% sensitivity for distant recurrence And 99.5% specificity at the sample level, this data shows that Reveal has the potential to significantly guide post-surgical monitoring and therapeutic decisions. This publication is building our data evidence for submission for Medicare reimbursement in breast cancer, which is expected this year. Turning to slide 10. Beyond CRC and breast, we have an extensive pipeline of clinical cohorts to further validity for garden reveal. We recently submitted data for publication supporting potential Medicare reimbursement for coverage in immunology therapeutic monitoring and have a number of ongoing clinical validity studies for additional cancers. We look forward to sharing updates on our progress throughout the year. Turning to slide 11, the oncology business is well positioned to continue to experience durable growth, benefiting from organic market growth, ASP tailwinds, and continued international expansion. Garden360 Liquid and Garden360 Tissue are further benefiting from recently expanded genomic and epigenomic breaths, which are unlocking greater utility and driving share gain. In MRD, a redoubled commercial focus following major COGS improvements and Medicare CRC surveillance reimbursement are helping to fuel growth. GardenReveal has seen strong uptake in breast cancer already, and we have additional publications of breast data and IO monitoring data this year that will help to further unlock demand and indications beyond CRC. Looking more closely at some of the recent highlights within our biopharma and data business in slide 12, we had another strong quarter for biopharma with first quarter revenue growing 21% year over year. We continue to see an increasing number of biopharma partnerships and growing mix of volume leveraging methylation analysis from our smart liquid biopsy platform. We recently announced a strategic collaboration agreement with Pfizer which meaningfully strengthens and expands our long-term partnership where GARDEN360 has been a preferred liquid biopsy test in various Pfizer clinical trials. We have also built a robust and growing pipeline of companion diagnostic deals. Lastly, pertaining to our GARDEN-informed real-world data business, we continue to expand our presence with large pharma partners, such as the recently announced Bayer and Concert AI collaboration, benefiting from the growing interest in our industry-leading methylation knowledge base and the expanding richness of our EMR-linked data offering. With that, I will now turn the call over to Amir Ali for an update on screening.