Natera's Q1 2025 Earnings Call: Contradictions Surface on Signatera Growth, Reimbursement, and Margins

Signatera growth expectations, reimbursement and ASP growth, Signatera volume growth trajectory, reimbursement and ASP improvement, issues with gross margin expectations are the key contradictions discussed in Natera's latest 2025Q1 earnings call.



Strong Financial Performance:
- Natera generated $502 million in revenue for Q1 2025, representing 37% growth year-on-year.
- The revenue growth was driven by an 855,000 units processed in the quarter, including a 52% year-on-year increase in Signatera clinical volumes, with 16,500 units additional compared to the previous quarter.

Expansion in Organ Health and Oncology:
- Organ Health showed over 50% year-on-year growth, with interest in donor-derived cell-free DNA and germline tests.
- Oncology, particularly Signatera, demonstrated record growth, contributing significantly to total volume increases.

Strategic Partnerships and Research:
- Natera participated in various conferences, presenting new data on Signatera, such as predicting outcomes in metastatic recurrence in breast cancer and showing strong performance in sarcoma research.
- These collaborations and research efforts are aimed at expanding Signatera's clinical utility and establishing its role as the standard of care in MRD.

Operational Efficiency and Margin Improvement:
- Gross margins improved to 63%, representing a more than 110 basis points increase compared to the previous quarter.
- This improvement was attributed to scale efficiencies, ASP growth, and successful reimbursement operations, which have driven significant margin expansion over the past several quarters.