What drove GH's earnings growth in 2024?

Guardant Health's (GH) earnings growth in 2024 was driven by several key factors:

1. **Revenue Growth**: Guardant Health experienced significant revenue growth, driven by a 34% increase in revenue in Q3 2024, reaching $191.5 million. This growth was fueled by a 21% increase in clinical tests and a 40% increase in biopharma tests. The company's ability to increase its revenue guidance for 2024 to a range of $720 to $725 million, up from the previous range of $690 to $700 million, underscores its strong market position and growth potential.
2. **Gross Margin Improvement**: The company's gross margin improved to 61% in Q3 2024 from 60% in the previous year, driven by higher reimbursement rates and test volumes. This improvement reflects better operational efficiency and pricing dynamics, particularly with the Medicare reimbursement rate for its Guardant360 LDT test rising to $5,000.
3. **Product Launches and Market Expansion**: The launch of new products such as Shield for colorectal cancer screening and the upgraded Guardant360 LVT has contributed to the revenue growth. The company's strategic product launches and market expansion efforts have positioned it well for growth in the precision oncology space.
4. **Increased ASP**: The average selling price (ASP) of Guardant360 increased to over $3,000, contributing to the revenue surge. This increase in ASP reflects the company's ability to maintain pricing power in a competitive market.
5. **Improved Free Cash Flow**: Although Guardant Health reported negative free cash flow, there was an improvement of $24.9 million from Q3 2023 to Q3 2024. This improvement in cash flow reflects enhanced cash management and operational efficiency.

In conclusion, Guardant Health's earnings growth in 2024 was driven by robust revenue growth, gross margin improvement, strategic product launches, increased ASP, and improved free cash flow. These factors combined to enable the company to achieve significant earnings growth in an increasingly competitive market.