Guardant Health, Inc.

Good afternoon. Thank you for attending the Gardened Health 2023-2025 earnings call. My name is Cameron and I'll be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. And during the Q&A session, we ask that you please limit yourselves to one question. Again, during the Q&A session, we ask that you please limit yourselves to one question. And I would now like to pass the conference over to your host, Zahra Khurshid with Garden Health. You may proceed.

Thank you. Earlier today, Garden Health released financial results for the quarter ended September 30th 2025. Joining me today from GARDEN are Helmi Eltuki, Co-CEO, Amir Ali 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-gap financial measures which are adjusted to exclude certain specified items additional information regarding material risks and uncertainties as well as the non-gap financial reconciliation the most directly comparable gap financial measures are available in the press release garden issued today as well as in our 10k and other filings with the sec GARDS 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 Helmi.

Thanks, Derek. Good afternoon, and thank you for joining our third quarter 2025 earnings call. Starting on slide three. Q3 was an exceptional quarter for Garden with broad-based growth across our business. Sympology volumes grew 40% as year-over-year volume growth continued to accelerate, driven by Garden 360 Liquid, Garden 360 Tissue, and Reveal. Our biopharma business grew nicely year-over-year with positive CDX momentum and screening volume accelerated with a sequential increase of 8,000 shield tests. Importantly, screening has started to generate meaningful revenue, tracking at an annual run rate of approximately $100 million roughly one year into the commercial launch of the FDA-approved product. Overall, we are very pleased with our performance this quarter, delivering 39% year-over-year revenue growth and crossing over $1 billion in annualized revenue for the first time. Excluding screening, we reached a major milestone with the rest of the business becoming cash flow positive one quarter earlier than expected. Indeed, this quarter sets us up very well to deliver on the long-term plan that we laid out at our investor day last month. Lastly, we recently surpassed 1 million cumulative clinical patients tested by Gardent, and as such, we want to highlight one of these patients with a story that captures the profound impact our tests are having in everyday clinical practice. A 67-year-old man had gone on screen for colorectal cancer for several years. Despite his physician-operating colonoscopy or stool-based tests, annually beginning in 2021. Each time, the patient declined to be screened. In December 2024, the physician ordered a shield blood test, and the patient agreed to complete the blood draw during the same visit. The result came back positive. When his physician explained that a positive shield result required a follow-up colonoscopy, the patient agreed to have the procedure despite previously resisting. The colonoscopy was performed in January of 2025, revealing colorectal cancer. The patient quickly began treatment, and at his most recent follow-up, he had successfully completed therapy and was doing well. This is a powerful example of how the SHIELD blood test can remove barriers to screening, provide a more pleasant and convenient option for patients, and ultimately improve outcomes. Now turning to top line performance in slide four. Q3 revenue grew 39% year over year to $265 million with strong performance again across our oncology screening and biopharma and data businesses. Taking a closer look at our oncology business on slide five. Oncology revenue increased 31% to $184 million and oncology volumes increased 40% year over year to approximately 74,000 tests in the third quarter. Turning to slide six, we have seen a clear acceleration in volume since July of last year, following the introduction of Garden360 Liquid on our smart platform. Since then, we have launched two additional waves of applications, driving five consecutive quarters of accelerating volume growth, and we look forward to future waves of smart app introductions developed through the power of Infinity AI to help fuel future growth. In addition to Garden360 Liquid, Garden360 tissue and reveal volumes also experience strong year-over-year growth. Moving on to slide seven. As a reminder, our Infinity AI Learning Engine applies AI across our data treasury of over 1 million patient samples, including more than 350,000 epigenetic profiles across more than 100 tumor types to bring powerful insights and new products to market faster than ever. Infinity AI enables higher resolution mapping of tumor biology giving rise to not only entirely new products in the clinical business, but novel signatures for faster drug discovery relevant to our biopharma business and new commercial insights and decision support tools. Turning to slide eight. To date, we've launched 15 groundbreaking smart apps on GARDEN360 LIQUID with dozens more in development that will roll out across GARDEN360 LIQUID, TISSUE, and REVEAL. Each new application builds towards what we see as a GPS for cancer care, guiding physicians with the right insights at every step of the patient journey. We believe these applications not only significantly expand the clinical utility of GARDEN360 Liquid, but further extend our technical leadership in the liquid CGP market. Looking more closely at some of the recent highlights within our oncology business in slide nine, Garden360 volume grew exceptionally, with more than 30% year-over-year growth. Garden360 tissue also had a great quarter, showing strong year-over-year acceleration following the major product upgrade released in the second quarter. Once again, Reveal contributed very nicely and continues to be our fastest-growing oncology product. In addition to the strong performance, we recently reached a major milestone with submission of our PMA application to the FDA for GARDEN360 Liquid. This submission has potential to streamline GARDEN360 Liquid with a single flagship FDA approved liquid biopsy for therapy selection, simplifying our portfolio, accelerating adoption, and further strengthening our leadership in this space. In addition, FDA approval would lay the foundation for ADLP designation which is an important mechanism for capturing the appropriate value for our expanded test offering in the future. We had a strong presence at ESMO 2025 with 15 abstracts spanning the cancer care continuum from MRD detection and recurrence monitoring with studies such as Pegasus to advanced stage tumor profiling and therapy response assessment. For reveal, we're making great progress with data generation and publications. We recently submitted our immuno-oncology therapy monitoring data package to Moldvx to support Medicare reimbursement and submitted data from our chemotherapy monitoring study for publication. Turning to slide 10 to take a closer look at our reveal data pipeline. Over the last few months, we've made significant progress in MRD, generating and publishing compelling data across multiple cancer types. Earlier this year, we achieved Medicare coverage for CRC surveillance and have since submitted dossiers for breast surveillance and, as I just mentioned, for immuno-oncology therapy monitoring. We plan to submit packages for chemotherapy and CDK4-6 inhibitor monitoring following those publications. Looking ahead, we have ongoing studies across more than five additional tumor types in both the adjuvant and surveillance settings. Together, this growing body of evidence will continue to strengthen the clinical utility and analytical validity of Reveal, supporting broader adoption in MRD. Turning now to slide 11. I'm proud of the progress we have made over the last few years in both driving demand and revenue growth across our portfolio. Looking ahead, we see multiple drivers across our oncology business that position us well for durable long-term growth. We will continue investing in commercial initiatives that make it easier for physicians to access our tests through portal enhancements, EMR integrations, and enhanced workflows. In our therapy selection business, Transitioning to the smart platform unlocks wave after wave of novel applications, many unique to Gartland, that will help us differentiate and continue gaining market share. And in MRD, a redoubled commercial focus and reveal, supported by significantly lower COGS and Medicare coverage for CRC surveillance, positions us for strong growth ahead. We're also excited to introduce an ultra-sensitive tissue-informed MRD assay, that will complement our best in class tissue free reveal test. Looking more closely at some of the recent highlights within our biopharma and data business in slide 12, we delivered another strong quarter with third quarter revenue growing 18% year over year. We continue to deepen our relationships with large pharma and had two additional companion diagnostic approvals in Q3. In late September, GARDEN360-CDX received FDA approval as a companion diagnostic to Enlurio for the treatment of ESR1-mutated advanced breast cancer. This marks the second FDA-approved indication in breast cancer and the sixth overall CDX claim approved by the FDA for GARDEN360-CDX. We also received regulatory approval in Japan for GARDEN360-CDX as a companion diagnostic to Enher2 for non-small cell lung cancer patients with HER2 mutations. We now have 23 total CDX approvals across biomarker and tumor types. Our robust and growing pipeline of partnerships ensures that near-term revenue visibility remains high. With that, I will now turn the call over to Amir Ali for an update on screening.

Thanks, Helmi. Moving on to slide 13. We delivered $24 million of SHIELD testing revenue in Q3, driven by approximately 24,000 tests. It's been incredibly rewarding to see SHIELD volume take off and hear story after story of patients positively impacted by this pioneering test, such as the story Helmi highlighted at the beginning of our call. Now, turning to slide 14 to take a closer look at screening highlights for the third quarter of 2025. Starting with CRC screenings. Given the strong performance and growing demand, we have accelerated the building out of our commercial infrastructure beyond our original plan. In addition, the breakthrough nature of the Shield brand has provided us with strategic partnership opportunities, including our recently announced collaborations with Quest Diagnostics and Path Group. Shield continues to generate strong demand from both patients and physicians with high adherence rates. As exemplified by the patient's story we shared earlier, we are seeing SHIELD tests get completed with blood samples received for more than 90% of ordered cases. This demonstrates the simplicity of SHIELD as a routine blood test for CRC screening that can be implemented into routine PCP practice. We are encouraged by the performance of our SHIELD CRCv2, which demonstrated solid clinical performance with improved sensitivity for stage 1 colorectal cancer. Turning to our multi-cancer initiatives, we are very excited to announce that SHIELD multi-cancer is now available nationwide through our clinical data collection initiative. At our investor day last month, we shared strong real-world performance data for SHIELD MCD from a study of 9,251 individuals. Specificity was 99%, consistent with earlier NCI findings, and positive predictive value was 41%, meaning that when SHIELD-MCD is positive, there was a 41% likelihood of cancer being present. Lastly, we are proud to partner with the American Cancer Society and look forward to ensuring that everyone has access to convenient and timely cancer screening so we can detect cancer earlier and provide opportunities for better outcomes. Taking a closer look at our recent strategic partnerships to scale our commercial infrastructure on slide 15. First, we were very excited to announce a strategy collaboration with Quest to expand and accelerate shield access more broadly in the U.S. Quest provider clients will be able to order shield tests and receive the results directly through the Quest connectivity system. We believe this strategic collaboration is valuable in two ways. First, It enables a better ordering experience and brings forward our nationwide EMR strategy by several years. This will give us immediate connectivity to 650,000 clinician and hospital accounts in the quad system. We believe this accelerated connectivity will drive our scale. We will also have access to deep logistical infrastructure, including 2,000 patient service centers and 6,000 in-office phlebotomists in the United States. Second, Quest promotional activities using their nationwide field force in combination with our own multi-hundred-person sales force will further strengthen our competitive position in the primary care market. Quest national commercial sales team will proactively educate primary care physicians and OBGYNs about the SHIELD test, accelerating awareness and adoption among their ordering providers. We expect SHIELD to be available for physician order through Quest in the first quarter of 2026. We will continue to process all SHIELD tests and control client services and billing and reimbursement operations. In addition, we recently announced our partnership with PathGroup, which expands SHIELD's reach to more than 250 health systems across 25 states, representing another exciting accelerator for physician and patient access. We are looking forward to seeing the positive impact of our growing commercial infrastructure in 2026 and years to come. We also remain confident in the potential inclusion of SHIELD in the American Cancer Society guidelines in the near future, which should be a catalyst for broader patient access. Moving on to slide 16. Our goal has always been to detect many cancer types early when they are most treatable. With that in mind, we developed SHIELD as a multi-cancer detection platform. Turning to slide 17, and as I mentioned earlier, we have now broadened access to SHIELD multi-cancer detection. In order for a patient to access this result report, their physician will need to opt in to receive the multi-cancer report, and the patient will need to authorize the release of medical records to Guardant Health. We successfully piloted this workflow in several accounts and following overwhelming positive feedback from physicians and strong participation by patients, we expanded this offering nationwide. Moving on to slide 18. The launch of this initiative establishes a scalable platform for clinical data generation. enables assessment of the utilization of MCD results in patient care, and provides a new avenue to expand patient access to multi-cancer detection, bringing this important innovation to a broader population. This nationwide initiative is expected to reach hundreds of thousands of participants, making it one of the largest prospective evidence generation initiatives for early cancer detection. Turning now to slide 19, with the expansion of SHIELD to include MCD results together with patient authorization to release medical data, we are now well-positioned to further strengthen our data modes. This high-quality data serves as a regulatory-grade source of truth, providing details on each patient's cancer journey that were previously not accessible. We will generate large-scale prospective evidence about the performance, clinical value, and safety profile. We believe this high-resolution data will power continuous improvement of SHIELD and CD and also lay the foundation to potentially expand into multi-disease detection. With that, I will now turn the call over to Mike for more detail on our financials.

Thanks, Amirali. Turning to slide 20, I'll now review select financial highlights for the quarter ended September 30th, 2025, unless otherwise noted, all growth rates are year-over-year. Total revenue for the third quarter grew 39% to $265.2 million, driven by strong performance across all three major revenue lines, oncology, biopharma and data, and screening. Oncology revenue increased 31% to $184.4 million, primarily driven by another quarter of accelerated test volume growth. We reported approximately 74,000 oncology tests in the third quarter, representing 40% growth reflecting continued positive momentum across the portfolio. Garden360 Liquid delivered its fifth consecutive quarter of accelerating growth, with volumes up more than 30%, supported by the expanding clinical utility enabled by smart apps launched over the past year. Garden360 Tissue also had an exceptional quarter, showing strong year-over-year acceleration following the major product upgrade released in the second quarter. Reveal remains our fastest-growing oncology product, benefiting from CRC surveillance reimbursement achieved earlier this year and continued strength across both breast and lung cancer indications. As a reminder, we do not include garden hereditary cancer testing or IHC volumes in our reported totals. We continue to expect minimal revenue contribution from these new offerings through 2025. Average selling prices remained stable compared to the prior quarter. Garden 360 liquid was in the range of $3,000 to $3,100. Garden 360 tissue was approximately $2,000. And Reveal was in the range of $600 to $700. We also recognized approximately $5 million of out-of-period oncology revenue in the third quarter compared to $12 million in the prior year period. Our biopharma and data business continued to perform well. with revenue increasing 18% to $54.7 million, which includes milestone revenue from two companion diagnostic approvals achieved during the quarter. The biopharma pipeline remains solid, providing confidence in both the near-term and long-term growth prospects. Screening revenue from Shield totaled $24.1 million, generated from 24,000 tests reported during the quarter. Shield ASP was approximately $880, above expectations, reflecting our continued focus on Medicare-covered patients. We also recognized approximately $3 million of out-of-period screening revenue, driven by better-than-expected reimbursement from Medicare Advantage payers for tests performed in the first half of 2025. This positive trend reinforces our confidence in both near-term and long-term expectations for Medicare Advantage reimbursement rates and overall SHIELD ASP targets. Turning to slide 21, we're very pleased with the year-over-year improvement in non-GAAP gross margin, which increased to 66% in Q3 2025 compared to 63% in the prior year period. This improvement was primarily driven by a significant reduction in reveal COGS, which have declined from over $1,000 per test in Q3 2024 to less than $500 per test, as well as strong progress in SHIELD gross margin. Shield's non-gap gross margin improved from negative levels at the launch just over a year ago to 55% in the third quarter of 2025. This improvement reflects strong ASPs under the Medicare ADLC rate of $1,495, disciplined focus on reimbursable tests, and continued COGS reduction. Shield's non-gap cost per test again trended lower sequentially and continues to be below $500 per test, consistent with our operational plan. These gains reflect the ongoing benefits of increased SHIELD volume and disciplined cost management. Turning to slide 22, non-GAAP operating expenses were $228.8 million in the third quarter, an increase of 22% in line with expectations. The increase was primarily driven by continued investments to expand our screening commercial infrastructure and scale sales and marketing for SHIELD. As we conclude 2025 and enter 2026, we'll maintain focus on these investments to maximize our first mover advantage in blood-based colorectal cancer screening. Adjusted EBITDA loss was $45.5 million, an improvement of $10.7 million, compared to a loss of $56.2 million in the third quarter of 2024. We remain disciplined in our approach to cash management, Free cash flow burn was $45.8 million, improving by $9.5 million compared to the prior year period. Importantly, excluding the screening business, Garden generated positive free cash flow during the quarter, a significant milestone achieved one quarter ahead of our stated target. We expect the core business to remain free cash flow positive in the fourth quarter, as well as for the full year 2026 and beyond. We ended the quarter with approximately $690 million in cash, cash equivalents, and restricted cash. Turning to the full year 2025 outlook on slide 23. Based on our strong year-to-date performance, we are raising full year 2025 revenue guidance for the third time this year to a range of $965 to $970 million, representing approximately a 31% growth compared to 2024. At the midpoint, this represents an increase of $47.5 million versus our prior range. We now expect oncology revenue to grow approximately 25% year-over-year, up from prior guidance of 20%, driven by stronger-than-expected oncology volumes in the third quarter and higher expected volumes for the remainder of the year. We now forecast total oncology test volume to grow more than 30%, compared to our previous expectation of greater than 27%. our biopharma and data business remains on track to deliver mid-teens growth for the full year. We're also increasing our SHIELD revenue guidance to $71 to $73 million, up from $55 to $60 million, reflecting higher expected volume of 80 to 82,000 tests compared to prior guidance of 68 to 73,000 tests. With continued improvement in gross margins, we're raising our full-year non-gap gross margin guidance 64% to 65%, up from 63% to 64%. As previously outlined, we plan to reinvest incremental screening gross profit to accelerate commercial expansion. Accordingly, we now expect 2025 non-GAAP operating expenses to be in the range of $865 to $875 million, representing a 14% to 16% increase compared to 2024. Finally, consistent with our long-term financial roadmap, we remain committed to reducing cash burn each year and achieving company-wide cash flow breakeven by the end of 2027. For the full year 2025, we continue to expect free cash flow burn of $225 to $235 million and improvement from $275 million in 2024. Turning to slide 24. We began 2025 with an ambitious set of strategic and operational objectives. Through our strong execution, we've delivered on nearly all of them, and we expect continued momentum as we close out the year. Our progress this quarter positions Garden for sustained success in 2026 with continued oncology volume growth and strong shield adoption. With that, we'll now open the call for questions.

Thank you. We will now begin the Q&A session. If you would like to ask a question, please press star followed by one on your telephone keypad. If you'd like to remove your question, press star followed by two. Again, to ask a question, press star one. And as a reminder, if you were using a speakerphone, please remember to pick up your handset before asking a question. And during the Q&A session, we ask that you limit your questions to one question. Again, during this Q&A session, we ask that you limit yourselves to one question. And we will pause here briefly as questions are registered. The first question comes from the line of Bradley Bowers with Mizuho. You may proceed.

Hey there. Thanks for the question. A strong performance across the businesses, but I'm going to focus on Shield here. I was wondering if you could walk us through kind of the Shield ASP dynamics exiting the year. You know, continued strong pricing, I don't think it's surprising given the ADLT pricing, but that $900 we're kind of exiting the year at, you know, it's supposed to walk down to $700 by 2028. You know, I know there's some mixed implications there, but is it kind of a steady degradation? Is there a fallout expected as ADLT pricing kind of rolls off the initial phase at the end of this year? Any color on the phasing of that would be helpful. Thank you.

Yeah, Brad, this is Mike. I can take that. Yeah, I mean, to break down what's in the SHIELD ASP, you know, we have the Medicare rate at $14.95. That came into play at the start of the second quarter. We're also receiving, you know, really good payment from Medicare Advantage payers. And so when they're paying us, they're paying us at this $14.95 rate also. And at the moment, the majority of our volume is skewed towards Medicare and Medicare Advantage. And then we have a tranche of commercial patients and we're effectively getting paid more or less zero for those. And so as we look at over the next few years, we're very confident in the 1495 rate, ADLT rate going forward. And in fact, we've just submitted our package back to Medicare on the On the day to submission of the pricing over the last six months, and that should help us maintain this 1495 right now, at least for the next two years and going forward. Also, we expect, you know, Medicare Advantage to continue to be strong. In fact, we would hope that it can get stronger than where it is today. The the fluctuation of the next couple years is going to be the percentage of commercial commercial payer patients that we have and how quickly we can ramp up the commercial reimbursement there. You know, we're assuming in 2028, there's just a higher proportion of commercial patients in the mix, and it's going to take us time to sort of establish that reimbursement rate. But, you know, overall, we're really happy with where the ASP is today, and we think it, you know, bodes well for as we go into 2026 and beyond.

The next question is from the line of Doug Schinkel with Wolf Research. You may proceed.

Hey, good afternoon, and thank you for taking my question. So another question on Shield. You mentioned at the Investor Day, and as well as in your prepared remarks, that potential ACS guideline inclusion later this year could set the stage for commercial coverage in, I think, at least 10 states. And we believe Anthem and other large blues are watching closely. So to the best of our knowledge, ACS concluded their CRC screening guideline review earlier this month. With that in mind, is guideline inclusion at this point a real possibility by year end with ACS? And then once guidelines are in place, how long do you think it's going to take for that to translate into you actually getting paid? And then the final component of the question is, you know, beyond those initial 10 or so states, there are other states like Florida and Louisiana where mandates have been brought in to include ACS as well as NCCN in addition to USPSVS. So if we think about that broader universe of states, which I think maybe gets you closer to 17, is it likely that reimbursement could occur not just in the initial 10, but closer to 20 over the next year or so? Thank you.

Thank you, Doug, for your question. Yeah, based on what we know, it appears that ACS research team is almost done with their work, so we remain confident about this potential for SHIELD to be included in We are monitoring the situation very closely, but we are very optimistic about that. In terms of the guide, it's not part of this year's guide. We are not counting on any kind of off-site associated ACS guideline. And it's going to take some time. When we go into the guideline, it gives us initially some upper hand, and it should have a strong – it should have a positive impact on our appeal success rate. initially and then at some point you know that would result into broad coverage and contracting successes. I'm proud of what our team has achieved so far on trying to broaden access to shield. You notice Florida now. You know it through consortium of, you know, supporters of making sure that innovative technology become accessible. now for instance medicaid patient population in florida have access to tests like shield and we are very proud of that and in general we are very pleased with some of the positive and regular dialogue that even we have with the administration about their priorities around cancer screening around prevention around making america healthy and i'm excited that looks like both president secretary are looking for ways to see how maybe the rate of cancer can get reduced in the country and how could we try to bring innovations to patients in a faster way. But we'll see what happens, but obviously we are not counting on any of those successes in our guide at this time.

The next question comes from the line of Panit Sudha with Learing Partners. You may proceed.

Hi. Thanks for taking my questions. Really impressive quarter here and really strong guide. If I may, I'm a early first one on Shield. Just growth is accelerating on volumes. Rightfully so, new product and ASP is also up. How should we think about 2026 growth for Shield and any early reception details that you can talk about on the MSED side, what's sort of the early attach rate? And for Helmi, you know, it's been almost a decade since you launched G360 when it appeared on the market for the first time. It's really impressive to see 10 years later, this product is growing 30% plus. Maybe just talk to us about what's behind that and how should we think about the growth going forward here for the liquid G360, which has been impressive. Thank you.

Maybe I make the shield part quick so I can talk about the oncology side. So as you've seen, we consistently raise our outlook throughout this year. We are very pleased with what we are seeing, the momentum that we are seeing. We want to be thoughtful and not get ahead of our skis. So, you know, I think still it's too early for us to comment about 2026 at the right time. We will talk about it, but we continue to be very confident about the long term outlooks that we shared in our investor day.

Yeah, no, we're very pleased with the performance. It's actually been 11 years and counting from when we launched 360. And so to see it grow at this rate, you know, I think at this point in the product cycle is really pleasing. But I think it is sort of, you know, what we expected in the sense that many people think of this as a test and they pattern match it to, you know, other tests in the market. But It truly is an application platform. When you think about these smart apps that we're introducing and really the multiplication of clinical utility and ability and capabilities of this platform, this is just the beginning in terms of where liquid biopsy can go. I mean, that is the point of liquid biopsy is you can come in, you can test many more patients, you can increase access, but you can test them longitudinally as well and You know, we're still at the very, very early innings in terms of where this can go, where this technology can go, just in oncology. So I think you're going to see a lot more, I think, of this trajectory in the coming years as we continue to expand on the capabilities of GARDEN360 over the next decade.

Next question comes from the line of Subbu Nambi with Guggenheim. You may proceed.

Thank you for taking my question. If you were to put a timeline, if we were to put a timeline to NCD FDA approval based on SHIELD trajectory next year, would FDA submission for NCD in late 2027 be a reasonable expectation?

For NCD? You know, we just actually brought in access and we just actually started getting access to this kind of clinical data that I talked about during our investor day and the preferred remark. So we need to monitor it and see how quickly we can build that evidence. But we are very optimistic that potentially through the way that we are doing, we can get access to hundreds of thousands of patient data and monitor actually the impact of MSAT testing in them. Patrick Dunnelly, The clinical value performance safety it's still too early for us to specifically put a timeline for FDA approval. Patrick Dunnelly, But we would monitor the situation closely and as we get more confidence, maybe we can talk about it at the right time.

Thank you.

The next question comes from the line and Patrick donelli with city, you may proceed.

Hey, guys. Thank you for taking the questions. Helmy, maybe one for you on reveal. I know in the past you've talked about driving the test per patient higher. Can you just talk about the traction there, giving the bigger push internally? What kind of progress you're seeing? Where can that go over the relative near term? And I know during the prepared remarks you talked about, obviously, the ongoing studies, the additional tumor types. Can you just talk about what we should be looking for and the key catalysts on the reveal side here over the next couple of quarters to keep an eye on? Thank you.

Yeah, great question. You know, I think we said at the beginning of the year as we got the surveillance indication from a reimbursement point of view for a veal that would be turning on a lot of the sort of capabilities to be able to pull in subsequent test orders and so on. And, you know, I'm pleased to report that, you know, we put a lot of those in place and we're seeing some of the benefits of that and the return on investment there. So we know we can pull in subsequent orders now in a sort of very straightforward way. And so that is going to pay dividends across our blood-based portfolio as we think about the emergence and really the place where longitudinal testing will sit in terms of management of patients and oncology with things like Serena 6 in terms of ESR1 with The upcoming launch of our therapy monitoring based on reveal, and then obviously with the reveal itself in the MRD setting, recurrence monitoring setting. So, yeah, really great progress. The number of tests per patient has gone up pretty nicely, and we're still, I would say, very much in the early cycles of really capitalizing on that investment.

The next question comes from the line of Tycho Peterson with Jefferies. You may proceed.

Hey, thanks. I would love to hear your views on the Pegasus data and just kind of, you know, how you think about that, you know, having kind of any impact on just MRD-driven therapy management, and how you think about clinical utility evidence in general and NCCN, you know, guidelines.

Yeah, you know, Pegasus... It was a really interesting study. It was a phase two signal finding study. And, you know, I think there are a few things that showed that I think, you know, were exciting to me, which is the fact that you could spare something like 75% of patients from chemotherapy, which meant, you know, a huge, huge reduction in terms of neurotoxicity and other toxicities related to such really harsh drugs. chemotherapy. And so I think Pegasus was based on our previous version of Reveal. And so I think we're really looking forward to Track C, which is based on a newer version. And really the field, having larger data sets to really understand exactly where the threshold should be in terms of escalation and de-escalation in terms of patients. But I think It's clear that I think there can be a lot of benefit by using this additional data in terms of ctDNA in the adjuvant and surveillance settings. But I think this is a good foundation and one that we can build on as we continue investing in both clinical validity and clinical utility studies around our repeal platform.

The next question comes from the line of Bill Bonello with Craig Hallam. You may proceed.

Hey, guys. I just want to push a little deeper on Sunit's third question about the growth in Garden 360. Could you just give us some sense today? I mean, if we think about, you know, what's out there that's driving, there's the underlying growth, there's the fact that you are probably taking share. But I'm also curious about sort of where we stand today in terms of, you know, a paradigm shift to liquid first or perhaps to combination testing with liquid and solid tumor. And then, you know, to what extent we are seeing some of the repeat testing that you're talking about or the use of 360 for monitoring, just trying to get a sense of you know, what inning we're at in terms of some of these new growth drivers and how much of that is still in front of us?

Yeah, great, great question. So, you know, we're still very early even in the penetration of liquid biopsy in terms of, you know, one test per lifetime. And so given, you know, the capabilities of 360 right now, they're just kind of mind-blowing to a lot of physicians in terms of the depth, the sensitivity, the application space. We see that growth in just that initial setting. So that means not only market growth, but we're seeing, from what we can see, significant share gains as well as a result. Then there are other growth drivers we're seeing. The fact that concurrent testing will likely become the standard of care of both tissue and liquids. And so that is also another sort of growth driver, and we're starting to see that really take off. And then finally, the tests per patient. And so we estimate at maturation that we should be able to go from one test per patient per lifetime to something like four and a half or four or five tests per patient per year, which obviously means more than probably doubling of where the market is today. Sorry, more than a 10x in terms of where the market is today. And so that's really exciting in terms of where things are going. And this is things like Serena 6 in terms of ESR1, longitudinal monitoring, therapy monitoring, the data that we have with IO monitoring, with chemo monitoring, and so on. All of that will feed into essentially establishing this new paradigm of essentially monitoring patients with ctDNA. We're already seeing our biopharma partners use this type of testing in their phase one, phase two, phase three studies, using it to decide do they sort of scale phase one to phase two, using it for dosing. And so that's the other piece that I think is not very well appreciated is that a lot of tests, you know, that you launch them, They're used exactly the same way 10 years later, 15 years later, and so on. They only have sort of one function. The application space and utility of how you use something like Garden360 and GardenReveal is really multiplying quarter by quarter and year by year. And so, yeah, this is a true platform. That word is often overused. But this is a true platform, and you're seeing what that means in terms of our volume growth and the trajectory that we laid out at our investor day.

The next question comes from the line of Michael Reiskin with Bank of America. You may proceed.

Hi, thank you for taking the question. This is Aaron on for Mike. I wanted to dive into or reveal volumes into specifically Reveal versus Ultra and how you guys are thinking about the R&D investment needed in both of those assets. And then the second part of that is, you know, MRD is still a fairly open space, you know, 10% penetrated what people are saying. So I guess, how are you guys looking at the market? How are you guys looking at, you know, growth and how should we be expecting both of those assets to grow over the next, you know, three years? Thank you.

We're very excited about our MRD franchise, you know, Reveal. is the leading tissue-free MRD test in the market. We know that there'll be essentially two parts of the market that'll be important, the tissue-free side and the tumor-informed side of things. And we're very pleased in terms of where we sit in the tissue-free side. It's our fastest-growing product in oncology. And the amount of data, the amount of investments, we have a 10x sort of data generation planned as we presented before next year. And so, you know, that flywheel is really sort of chugging away. And so we're excited about that trajectory. And then, you know, in terms of the tumor informed side, you know, I think we agree with you. There's, you know, kind of a lot of opportunity there in terms of a, you know, test that can really hit the needs of both biopharma and clinicians in terms of the sensitivity that is really required for that setting. And yeah, we're just very pleased with the technology that we've developed. If you think about it, just everything we've built as a company is at a really nice point. The fact that we've really chugging away in our tissue volumes and the capabilities we have with using very low amounts of input material, very fast turnaround times, the sensitivity we have on the liquid biopsy side and the capabilities and chugs down and the speed to results. All of that is coming together and reveal ultra. And I think it's going to be a product that will frankly blow everyone away once we launch it. Very excited for that and making really good progress.

The next question comes from the line of Daniel Markowitz with Evercore ISI. You may proceed. Daniel, your line may be muted. Our next question comes from the line of Mark Massaro with BTIG. You may proceed.

Hey, guys. Thanks for taking the questions. The first one is for you, Amiralee. You know, just looking at the shield, it's great to see this trajectory. Is it reasonable to think in the near term that, you know, 1,000 sequential increase from the prior quarter is the right way to think about this? Just looking at the Q4 implied guide, the high end, it's plus 9. You just did plus 8. prior quarter plus seven, or, uh, so I guess I'm asking if, if this is a reasonable run rate in the near term, or do you think there's, um, obviously upside from, you know, the partnerships with quest path group, um, you know, certainly guideline inclusion and potential DTC uplift. Uh, so that's my first part. Uh, the second part is for Helmy. Um, Helmy, can you just give us a sense for reveal ultra? I believe this is the tumor-informed that can go down to one part per million. Just give us a sense for, you know, maybe if you could clarify if that is commercially launched now and how we should think about the timing of CMS reimbursement and additional data readouts. Thanks.

Thanks, Mark. So in terms of sequential growth, like our guide said, What has ended in the midpoint is like another 8,000 Q over Q growth in Q4. We are going to monitor the situation closely. And again, we don't want to get ahead of our skis and see what's going to happen. And for next year, we are going to talk about it at the right time. There are a bunch of catalysts, you know, still in front of us. You know, this Quest Path Group collaboration should be a positive thing. Guideline inclusion is definitely a positive thing. you know, continuous build out of our own commercial team as we continue to next year would be a positive thing. So, and we are confident about the target that we put out there for 2028. So, but we go at it one step at a time and we are very excited to see what's going to happen in Q4.

Yeah, in terms of Reveal Ultra, you know, I think the nice thing is we built such a you know, strong capabilities around MRD. When you think about R&D and all the clinical studies, you know, tens of thousands of samples and many of those we've actually retained tissue. So it's actually, you know, not, you know, very heavy investment for us to essentially leverage that to really come out with the sort of ultra technology, the tumor-informed technology we have. We're seeing really good data, really excited in terms of where this can go. In terms of the sensitivity, we think it can bring it down to a much lower level than exists in the field or, frankly, exists in the pipeline of companies we've seen out there. And, you know, I would say that, you know, in terms of timing, we're keeping that close to the chest. So stay tuned, but making good progress. And we wouldn't be talking about it if it wasn't something that, you know, was not in the too distant future.

The next question comes from the line of Casey Woodring with JP Morgan. You may proceed.

Great. Thanks for taking my questions. On the SHIELD performance in the quarter, maybe as a follow-up to Mark's question, can you provide any KPIs around maybe average testing frequency per physician and whether volumes are coming from new-time CRC screeners? And then just my second question here, Mike, if you can provide any color on gross margin for Shield and Reveal embedded in the updated guide of 64% to 65% for this year, that'd be helpful. Thank you.

Yeah, maybe some KPIs. Actually, it's exciting that the breadth of ordering continues to increase queue over queue. The depth of ordering continues to be very strong. So once the accounts actually start using Shield and we go through activation, uh the depth of ordering is very solid which is really an endorsement of how deep this market is and mainly how many on-screen cancer patients are out there in the accounts that we are going to so we are seeing their doctors we are successfully bleeding them and so forth so the other kpi to share which we are very excited about is we continue to see very high adherence rates when the doctors order this that's more than 90 percent of those which really gives us a bunch of efficiencies in our S&M investments.

Yeah, and on the gross margins, with Shield, in their prepared remarks, we mentioned that the Shield gross margin this quarter, Q3, was 55%. And so ASPs are close to $900 per share. And our cost per test now is consistently lower than $500. So we've made really great progress with shield gross margins. And then on the reveal side, again, we've made fantastic progress over the last sort of nine months or so. And just to break that out a bit, our ASPs for reveal continue to be in the $600 to $700 range. And again, since the start of the year, our reveal cost per test are consistently below $500. So we have a nice gross margin on Reveal. It's a little bit lower than the 55% we've got on Shield, but they're really what's helping drive our overall blended gross margin, and we've seen the positive impact on that going from 63% in Q3 last year to 66%. So I think good progress across the board with gross margins.

The next question comes from the line of Kyle Mixon with Canaccord. You may proceed.

Hey, guys. Thanks for the questions. Congrats on the quarter. On reveal, is it still possible you get ADLT status and breast Medicare coverage by the end of this year? Is that more likely a 26 milestone? And then secondly, we had a competitor this week announce advanced adenoma sensitivity data for its colon cancer blood tests. the confidence interval lower bound was 15%, and the study had a lot of very small lesions. Just curious, do you think that a test with AA materially higher than the 13% for SHIELD would pose a threat and do you, like, you know, one day aim to improve upon your AA data still?

Yeah, I mean, ADO2 status, you know, still a work in progress. Obviously, with the government shutdown, it's sort of paused some of the discussions a little bit. And then, yeah, we're still working on breast and IO, we've always said, you know, probably more likely early next year, and yeah, we're still, I think, on track for them.

Regarding the data disclosures, you know, it's we obviously we applaud anybody who's trying to contribute in this difficult area. This is a hard science area. And we feel very comfortable with our leadership position and our technology stack, our data and what we are doing. We've seen similar results in this field now a few times. Again, this is a hard field. It's a hard science field, and we believe we have the best tech stack, very innovative technology, homebrew that gives us confidence. We have a three-year head start on CRC now and probably even much longer on the multi-cancer side relative to some of these competitions. they feel very good with our position at this time. And definitely there are some pipeline activities that we are working on. We'll see what happens.

The next question is from the line of Luke Sergat with Barclays. You may proceed.

Great. Thanks for the questions. Just wanted to touch here on the step-up in OPEX that you guys have for the year implied in 4Q. And really just kind of Dig in where that spend, the incremental spend is going and where you guys think from a S&M perspective, where you guys want to exit the year as a number of reps as you think about SHIELD and oncology and Reveal and kind of how that, if you're able to pull forward any of those costs given the success you've had in some of these, in some of the other launches.

Yeah. I mean, for the OPEX step hook, It's pretty much all in the sales and marketing line. You know, I think we've been consistent throughout the year whereby, you know, we said we're going to be reinvesting any incremental gross profit in screening back into the sales and marketing line to really drive that commercial build out. And we'll continue to do that. You know, I think it's the biggest focus for us. as we look to scale. You know, we've said on the screening side, you know, we've now got over 250 salespeople out in the field. So that's a significant ramp up during the year. And we'll, you know, continue to look at how we build that out. On the oncology side, it's a little bit larger than that. And we've got a, you know, very sort of well built out commercial infrastructure with oncology. But yeah, as we look forward and going to 2026, I think, you know, you should expect to see a similar ramp in the sales and marketing line. We're very focused in the R&D line and the G&A line at keeping them relatively flat. And so I think, you know, that's the plan for the next 12 months.

The next question comes from the line of Dan Brennan with TD Cohen. You may proceed.

Great. Thank you. Congrats on the quarter. Maybe just on G360, just a couple. So maybe one for Mike and then one for Helmi. Just on the guide, I know the clinical oncology volume guide is now greater than 30. Does that contemplate like a big step down from the, you know, the G360 volume, which has accelerated tremendously year to date, obviously, from the Q3 30%? And then B, more so for Helmi, I know you've given a lot of color on, you know, the excitement over the kind of outlook for D360, but could you give a little more color on the acceleration you've seen year-to-date? Is it more share gains, which you talked about? Like, are you seeing, like, hospitals consolidate? You think it's more just penetration of CGP, or do you think it's more like this test-per-patient pickup? Any way you can kind of dissect a little bit of this really strong acceleration? Thank you.

Yeah, maybe I'll just start on our Q4 guide. So, you know, we had... We had a great Q3. I think, you know, our guide for Gallant 360 volume and for overall oncology volume, you know, it implies sequential growth in Q4. It implies a very strong year-over-year growth in volume. So, yeah, if you back into it, it's over 30% year-over-year growth in Q4. So I think, yeah, we've just continued to expect the momentum. that we saw in Q3 continuing to Q4. So I think for us, things are looking very, very strong as we get towards the end of the year.

Yeah, in terms of growth driver, I think what you're seeing really is the fact that, you know, it's just a very compelling test from a value proposition. So I think a lot of what you're seeing is some of the share gains, you know, from the sort of other tests in the market from, you know, other hospitals and so on. So that's been exciting. We're seeing a little bit of the sort of, you know, increase in testing in terms of longitudinally, but I would say that's a very minor part. I think that's still a lot of, that's still another major growth catalyst for us in the future that we haven't really tapped into. And then third piece is, you know, this test has so many capabilities, things like being able to determine the type of cancer with someone who has a cancer of unknown primary, subtyping. So if you think about the long tail of cancers where liquid biopsies and even tumor biopsies aren't really utilized, the fact that we have this smart platform with epigenetics and so on that can give so much more insight into tumor biology, I think you're seeing penetration into some of these longer tail of cancers as well.

One more question, please, Cameron.

Our last question comes from the line of Dan Arias with Stiefel. You may proceed.

Yeah, good afternoon, guys. Thanks. Helmy, I just wanted to go back to reveal, can you maybe talk about where things are on the commercial side when it comes to reimbursement and colorectal? What's a good ballpark number at this point for just the percentage of tests that are getting paid for? I guess stage two and three patients would be the right the population to ask about there, but really just trying to understand side of CMS in your key indication there.

Yeah, Dan, it's Mike here, and it cut out a bit towards the end, but I think you're asking about reveal reimbursements with CRC. You know, CRC now is, it's roughly 50% of our volume. It continues to be at that sort of level. And, you know, the rest being made at the moment from breast and lung. And where we are getting reimbursed is for all of the, now whenever we run a CRC test, we're getting reimbursed for all of the tests that we do for Medica. And that's at the 1640 rate. And we're getting good pull through. with Medicare Advantage. We're starting to see traction with commercial payers. That's improving all of the time. And so I think we're feeling good at where the reimbursement level is. And then as we look forward, we think there's continuous runway with Reveal. Again, more and more Medicare Advantage and commercial payments on the CRC side. But as we just mentioned, we're anticipating Reveal breast reimbursement. We've submitted the data package to Moldy X for Reveal IO. And so hopefully going forward, you know, we're getting incremental Medicare reimbursement and incremental reimbursement from all of the payers as we move into 26.

That was our last question. That concludes today's call. Thank you for your participation and enjoy the rest of your day.