Natera, Inc.

Thanks, operator. Good afternoon. Thank you for joining our conference call to discuss the results of our first quarter of 2025. On the line, I'm joined by Steve Chapman, our CEO, and Salman Machkevich, President, Clinical Diagnostics. Ash Leshin, General Manager of Oncology, will be available for Q&A. Today's conference call is being broadcast live via webcast. We will be referring to a slide presentation that has been posted to investor.meterra.com. A replay of the call will also be posted to our IR website as soon as it's available. Starting on slide two, during the course of this conference call, we will be making forward-looking statements regarding future events and our anticipated future performance, such as our operational and financial outlook and projections, our assumptions for that outlook, market size, partnerships, clinical studies, and expected results, opportunities and strategies, and expectations for various current and future products, including product capabilities, expected release dates, reimbursement coverage, and related effects on our financial and operating results. We caution you that such statements reflect our best judgment based on factors currently known to us and that actual events or results could differ materially. Please refer to the documents we filed from time to time with the SEC, including our most recent form 10-K or 10-Q and the form 8-K filed with today's press release. Those documents identify important risks and other factors that may cause our actual results to differ materially from those contained in or suggested by the forward-looking statements. Forward-looking statements made during the call are being made as of today, May 8th, 2025. If this call is replayed or reviewed after today, the information presented during the call may not contain current or accurate information. The therapist claims any obligation to update or revise any forward-looking statements. We will provide guidance on today's call, but will not provide any further guidance or updates on our performance during the quarter unless we do so in a public forum. We will quote a number of numeric or growth changes as we discuss our financial performance. And unless otherwise noted, each such reference represents a year-on-year comparison. And now I'd like to turn the call over to Steve. Steve?

Thanks, Mike. Let's get to the highlights on the next slide. We generated 502 million in revenue this quarter compared to 368 million in Q1 of last year, which represents approximately 37% growth. We had an outstanding volume quarter across the board with 855,000 units processed in the quarter. This included a big step up in women's health volumes over Q4 of last year, and a record volume quarter for Signatera. Signatera clinical volumes grew 52% year-on-year and increased by roughly 16.5 thousand units compared to Q4, which is our best sequential unit quarter yet for Signatera. Gross margins were 63% in the quarter, and when you back out, true-ups grew more than 110 basis points just compared to Q4, so we're feeling great about the margin expansion we're still seeing in the business. We also generated 23 million in cash, even as we doubled down on growth investments as discussed on the Q4 call in February. With all this momentum, we are in a position to substantially raise the revenue guide for the remainder of the year. We now expect revenues to be in the range of 1.94 billion to 2.02 billion this year, a raise of $70 million from the midpoint of our prior guidance given just a few months ago. This implies about 26% revenue growth year on year, extra ups, which is really strong. For strategic highlights in the business, starting off most recently at ISHLT, we shared a positive readout of the prospective defined study in heart transplantation, which demonstrated Prospera's ability to predict clinical outcomes in heart transplant. Remarkably, Prospera outperformed biopsy in predicting graft dysfunction one year after transplant. The study also tested DQS, or donor quantity score, which is a novel feature unique to PROSPERA. PROSPERA with DQS outperformed donor fraction alone in predicting graft dysfunction. PROSPERA with DQS's outperformance over fraction alone was also published this week in a separate study in the American Journal of Transplantation. The paper reviewed the head-to-head performance of donor quantity score, DQS, versus donor fraction alone, and found that DQS performed with higher accuracy. Solomon will discuss this further later in the call. Next week, we'll attend the ESMO Breast Annual Meeting. Most notably, we look forward to a presentation on the I-SPY2 trial, which is a great collaboration that has produced strong data on signatera in different settings of breast cancer. This particular trial will report on the ability of Signatera to predict outcomes for metastatic recurrence in high-risk early-stage breast cancer. It's especially novel as it looks at the neoadjuvant setting and measures ctDNA levels at diagnosis prior to treatment. In the study, Signatera's unique method goes beyond just positive and negative results to categorize positive patients by tumor quantity and then shows the five-year recurrence-free survival, which correlates with that quantity. While serial testing and ctDNA dynamics will certainly help further refine a patient's trajectory, we're seeing a significant amount of clinical information coming from this single blood draw prior to any treatment beginning. Later this month at ASCO, we'll have the largest and broadest set of data that we've ever had, with more than 25 presentations on a wide range of tumor types, including six oral presentations. We have eight in breast cancer alone, several in colorectal and GU, two real-world evidence studies based on our proprietary database, and a large-scale readout of our signatory genome test. And finally, we're pleased to see critical findings in sarcoma from a Stanford-led study presented at the Society of Surgical Oncology Conference last month. With more than 2,100 samples, this is the largest sarcoma study in ctDNA analysis to date, and the results were excellent. Sarcoma is an important indication with 17,000 new diagnoses per year in the United States, so this is similar in size to ovarian cancer, and it's a very important cancer type because there are significant unmet needs that need to be addressed, and it's a tough cancer to treat. While we're extending our lead in breast, colorectal, muscle-invasive bladder, lung, and the other initial histologies, we're making significant progress in other tumor types. Sarcoma is just one example of many where this type of data will be reading out. Okay, so let's jump into some of the volume highlights on the next slide. As you can see, we processed 850,000 tests in the quarter, with strong growth across the business. This represents a sequential increase of 8% over Q4 of 2024, which is one of the best quarters we've ever had. Women's Health had an outstanding quarter, growing more than 40,000 units sequentially in Q1 versus Q4 alone. This excellent growth extends what was a very strong 2024, where women's health grew hundreds of thousands of units year over year, even when excluding the impact of Evitae. Organ health was also very strong in the quarter. We saw north of 50% year-on-year growth in organ health and a lot of interest in our donor-derived cell-free DNA and germline tests. Okay, moving on to oncology. The next slide shows the progression of signatory clinical units over the last eight quarters. We're very excited to see a record growth quarter with 16,500 growth units over Q4. This is the fastest that we've ever grown and a testament to the strength of our technology, the breadth and quality of our clinical data, and the great user experience we've built to help patients with cancer. We estimate that over 45% of oncologists in the United States ordered a Signatera test last quarter. We think the next two years is an especially critical period for MRD as we evolve toward becoming the standard of care, and we are continuing to invest to expand clinical utility and to innovate to help as many patients as possible. Okay, the next slide shows our revenue progression over the last six quarters. We're excited to cross the $500 million in revenue threshold for the first time in a single quarter. Despite the scale at which we're now operating, we still grew revenues 37% over Q1 of last year. In addition to the volume momentum, the investments we've made in our reimbursement operations continue to improve average selling prices, and we're seeing ASP strength across the board in women's health, organ health, and oncology. Signature ASPs moved above $1,100 in the quarter, driven primarily by continued execution on securing Medicare Advantage reimbursement. All of this effort is allowing revenue growth to outpace volume growth. Of course, ASP growth has been a major driver of our margin expansion over time as well, as this chart shows how we've moved from 39% to 63% in the last several quarters. The 63% includes about $34 million in true-ups, and we're really pleased to see our underlying gross margin improvement, again, about 110 basis points for 59.3% in Q4 to 2024 to 60.4% Q1 of 2025. That gross margin improvement came from all the positive trends on ASPs, and COGS were excellent again in the quarter across the business as we continue to get scale efficiencies from the robust volume growth. We feel great about our gross margin trajectory as we look out over the next several years. In the near term, we expect signature ASPs to increase as we improve on our Medicare Advantage reimbursement, and we also hope to see some green shoots in biomarker states with commercial plans later this year, as we've previously discussed. Longer term, we've got some significant potential opportunities that could further drive margin improvements. Guidelines in the United States and Japan for Signatera have the potential to move ASPs above $2,000 per test. We've made a ton of progress on the women's health side as well on ASPs, but we still have carrier screening guidelines and 22Q guidelines ahead of us. As we continue to grow share in Oregon Health, Prospera and ArenaSite can also both be accreted to gross margins as well. We previously described a longer-term goal to get gross margins above 70% over time, and I think we remain very well positioned to reach that target. We started this year with a guide to remain cash flow breakeven, and we were pleased to now generate $23 million of cash in the quarter. We demonstrated in the second half of 2024, we are capable of generating much more free cashflow right now, but we see 2025 as a crucial investment year for us, particularly around Signatera. Given the potential size of the market, we think Signatera could eventually generate more than 5 billion in revenue annually. So it makes sense to continue funding high ROIC investments in commercial operations, clinical trials, and product improvements. On that topic, We've never had a more exciting slate of data reading out across the business this summer, and I want Solomon to walk you through all of that data now. Solomon?

Thanks, Steve, and good afternoon, everyone. I'll start off with Oregon Health. Steve mentioned that we just published an important manuscript in the American Journal of Transplantation, the premier scientific journal in the field. This paper demonstrated the excellent results of our two threshold algorithm for Prospera, which combines donor fraction with the donor quantity score, also called DQS. Using this unique two threshold algorithm, Prospera with DQS delivered better sensitivity and specificity than donor fraction alone, including a 37% reduction in false positives. The same algorithm was also evaluated in our DEFINE-HEARTS trial, which was presented last week at the ISHLT conference. As a reminder, the defined trial is a large-scale, prospective, multicenter, longitudinal study of donor DNA in heart transplant patients. The objective of the study was to assess serial cell-free DNA dynamics and its association with clinical outcomes in the first year after heart transplant. We evaluated more than 100 patients and more than 1,000 samples, utilizing Prospera with DQS to measure levels of donor DNA in the blood. The results showed that patients with at least one elevated Prospera result were at significantly higher risk for experiencing an adverse event in the first year, which is defined as graft rejection, graft dysfunction, re-transplantation, or death. In this trial, Prospera also outperformed serial biopsy by threefold in predicting graft dysfunction. Before Prospera, endomyocardial biopsies used to be performed every month as part of standard surveillance in many heart transplant centers. Obviously, a highly undesirable procedure that carries inherent risk. But more and more, we are starting to see physicians replace biopsies with Prospera. Turning now to oncology, where we continue to make excellent progress. At this month's ESMO Breast Congress coming up in Munich, we're excited to present new data from multiple studies, including the I-5-2 trial that will highlight Signatera's ability to predict long-term outcomes in early-stage breast cancer patients. The data from over 700 patients will show that testing Signatera negative at diagnosis is an extremely good prognostic marker after being treated with surgery and chemotherapy. Not only was Signatera status at diagnosis a highly significant predictor of outcome, regardless of disease subtype, But the quantity of tumor burden, as measured by ctDNA, was also correlated with outcomes. This reflects Signatera's differentiated quantification capabilities. And it's the first time to our knowledge that anyone has demonstrated the clinical value of absolute ctDNA quantity at time of diagnosis. These findings open new therapeutic strategies, including the potential for Signatera negative patients to skip chemotherapy and other intensive forms of treatment. The question is that Natera will evaluate definitively in upcoming prospective trials. This data also highlights the benefit of starting signatera testing at the earliest stage of a patient's treatment journey, right at diagnosis. At this time, we believe signatera will become a standard component of the diagnostic workup for a breast cancer patient, much like testing for HER2 status or hormone receptor status today. Beyond our data generation efforts and the core indications, we continue to pursue expansion into new histologies at a rapid pace. One such indication is sarcoma, with over 17,000 new cases diagnosed in the U.S. every year. Because of the heterogeneous nature of this disease, both adjuvant and surveillance strategies tend to be highly individualized. Surveillance that can include frequent imaging for up to 10 years, highlighting concerns for radiation exposure in such patients. There's a strong clinical unmet need here, which we think is ideal for Signatera. So we're very pleased about the recently presented sarcoma study out of Stanford University, showing the validity and utility of serial Signatera in over 200 sarcoma patients and more than 2,000 plasma samples, representing, to our knowledge, the largest study to date of ctDNA monitoring in sarcoma. The findings showed exceptional test performance, including overall recurrent sensitivity of 89% and specificity of 100%. These numbers were strong across subtypes, including some of the more clinically difficult-to-treat histologies like Lyomyosarcoma, where the sensitivity was 93%. We look forward to these results being published and working more closely with the sarcoma community. a great example of Natera's strategy to introduce and validate Signatera across all cancer types. Looking ahead now, this will be a busy and exciting ASCO conference for Natera, with nearly 30 abstracts and presentations planned across multiple tumor types, including, as Steve noted, six oral presentations. Four of those orals will be in breast cancer alone, two of which are in the neoadjuvant setting, building up the momentum with the iSlide2 trial. One of them, We'll have interim results from our prospective randomized DARE trial, and the fourth breast cancer oral presentation will demonstrate the utility of treatment monitoring in the metastatic setting, which is something new. These studies started years ago, and the results will serve to further expand our data leadership in MRD. We also look forward to presenting posters with clinical performance data in Merkel cell carcinoma and other cancer types, and a readout from our new signature genome assay. As we announced previously, the genome version of Signatera is now broadly available. This version of the test leverages Natera's patented multiclutch PCR technology and our targeted and de-sequencing approach. It detects ctDNA at frequencies as low as a single tumor copy per million, and it is being offered alongside the Signatera exome assay, which itself regularly detects in the ultra-sensitive range and can get down to the low single-digit parts per million as well. At ASCO, we will present our first clinical data with Cignatera genome, encompassing hundreds of patients and thousands of plasma samples across multiple tumor types. The assay performance looks very strong, with longitudinal sensitivities ranging from the 90s up to 100%, depending on histology, and with specificity approaching 100%. We believe the specificity is very important, and we're pleased to see that Cignatera's high specificity is maintained, even with the improved sensitivity of the genomes. This is something where we have seen other MRD labs struggle with clinical specificity data that is low or simply not reported at all. We've generally seen competing MRD labs struggle with translating extreme analytical claims into clinical performance. Furthermore, we've developed a research version of our genome assay that's available to our academic and pharma collaborators that will improve detection to levels even below a single part per million. opening, we believe, even more research opportunities. So we're really excited about what lies ahead. We've got a lot of incredible data reading out in the near future. As you can see from our continued strong volume growth, the medical community is responding positively to the utility of Signaterra, and we expect that trend to continue as we move ahead. So with that, I'll turn it over to Mike to cover the financials and the guide. Mike?