Guardant Health's Q3 2025: Contradictions Emerge on Shield ASP, Reveal Test Frequency, and Oncology Growth Strategy

Date of Call: October 29, 2025

Financials Results

• Revenue: $265.2M in Q3 2025, up 39% year-over-year
• Gross Margin: Non-GAAP gross margin 66% in Q3 2025, compared to 63% in Q3 2024

Guidance:

• Raised full-year 2025 revenue guidance to $965M–$970M (~31% YoY)
• Oncology revenue expected ~25% YoY and oncology test volume >30% YoY
• Biopharma & data: mid-teens growth; Shield revenue raised to $71M–$73M (80k–82k tests)
• Raised full-year non-GAAP gross margin guide to 64%–65%
• Non-GAAP operating expenses expected $865M–$875M; incremental screening gross profit to be reinvested into S&M
• Full-year 2025 free cash flow burn $225M–$235M; company-wide cash flow breakeven targeted by end of 2027
• Core (excluding screening) business expected to be free cash flow positive in Q4 and for full year 2026

Business Commentary:

* Strong Financial Performance: - Guardant Health reported revenue of $265 million for Q3 2025, representing 39% year-over-year growth. - The company's oncology revenue increased 31% to $184 million, with oncology volumes rising 40% to approximately 74,000 tests. - The growth was attributed to broad-based demand across oncology screening and biopharma data businesses.

• Accelerating Oncology Volume Growth:
• Oncology volumes grew 40% in Q3, with Guardant360 Liquid experiencing over 30% growth in volumes.

• This acceleration was driven by new applications and increased clinical utility of Guardant360 Liquid, leading to five consecutive quarters of accelerating volume growth.

• Screening Revenue and Partnerships:

• Screening revenue from Shield reached $24.1 million, reflecting 24,000 tests reported in Q3.

• Strategic partnerships with Quest Diagnostics and PathGroup are expected to accelerate Shield access and physician adoption, establishing a scalable platform for clinical data generation.

• Biopharma and Data Business Expansion:

• The biopharma and data business reported 18% year-over-year revenue growth, with two additional companion diagnostic approvals in Q3.
• This expansion was supported by a robust CDx pipeline and strong relationships with large pharmaceutical companies.

Sentiment Analysis:

Overall Tone: Positive

• "Q3 was an exceptional quarter"; management reported "delivering 39% year-over-year revenue growth" and "crossing over $1 billion in annualized revenue." They also said the rest of the business (excluding screening) became "cash flow positive one quarter earlier than expected" and raised full-year revenue and margin guidance, signaling strong operational momentum.

Q&A:

• Question from Bradley Bowers (Mizuho Securities USA LLC): Walk us through Shield ASP dynamics exiting the year; will ASP decline steadily to $700 by 2028 and how will ADLT pricing/Medicare Advantage/commercial mix impact phasing?
  Response: ASP driven by $1,495 Medicare ADLT and strong Medicare Advantage payments today; management is confident in the $1,495 rate for the next ~2 years and expects future ASP pressure reflects a higher mix of commercial patients over time as commercial reimbursement scales.

• Question from Douglas Schenkel (Wolfe Research): Is inclusion of Shield in ACS guidelines a real possibility by year-end and how quickly would guideline inclusion translate to payment, potentially expanding state mandates and reimbursement reach?
  Response: Management is optimistic ACS review appears near complete but is not counting on guideline inclusion in near-term guidance; they said guidelines would improve appeals and eventually support coverage/contracting but timing to payment is uncertain.

• Question from Puneet Souda (Leerink Partners LLC): How should we think about 2026 growth for Shield and early reception/attach rate for Shield MCD? And for G360, what's behind its 30%+ growth and outlook?
  Response: Too early to provide 2026 Shield guidance; MCD expansion is early but promising; Guardant360 growth is driven by its Smart app application platform—expanded clinical utility and new apps underpin continued multi-year growth.

• Question from Subhalaxmi Nambi (Guggenheim Securities, LLC): Would an FDA submission for MCD in late 2027 be reasonable based on Shield trajectory next year?
  Response: No specific timeline provided; management said they just broadened access and are building evidence from large-scale clinical data and will monitor progress before committing to an FDA submission timetable.

• Question from Patrick Donnelly (Citigroup Inc.): Progress on increasing tests per patient for Reveal, traction seen, and key catalysts to watch over the next quarters?
  Response: Reveal is already increasing tests per patient via implemented workflows; key near-term catalysts include SERENA-6, upcoming therapy-monitoring launches and ongoing MRD/surveillance studies that should drive further adoption.

• Question from Tycho Peterson (Jefferies LLC): Views on PEGASUS data impact on MRD-driven therapy management and clinical utility/NCCN guideline prospects?
  Response: PEGASUS (phase II signal-finding) suggests substantial chemo sparing (reported ~75% in study) and provides a foundation for larger trials (e.g., TRACC); more/larger datasets will be needed to drive guideline inclusion and clinical utility acceptance.

• Question from William Bonello (Craig-Hallum Capital Group LLC): Drivers behind Guardant360's acceleration—share gains, liquid-first, combination testing, repeat testing—and what inning are these growth drivers in?
  Response: Acceleration is primarily share gains and increasing penetration; concurrent tissue+liquid testing and longitudinal/monitoring use cases are early but represent significant upside, with management estimating multi-test-per-patient long-term potential.

• Question from Aaron (Bank of America) (on behalf of Mike): Reveal vs Ultra volumes, R&D investment allocation, MRD market penetration (~10%) and growth expectations for both assets over next 3 years?
  Response: Reveal is the leading tissue-free MRD and is the fastest-growing oncology product; Reveal Ultra (tumor-informed) is progressing with high expected sensitivity, leveraging existing data/tissue assets with modest incremental R&D burden and expected to materially enhance the MRD offering.

• Question from Mark Massaro (BTIG, LLC): Is a ~1,000-test sequential increase (≈8k QoQ) a reasonable near-term run rate for Shield, and status/timing for Reveal Ultra commercial launch and CMS reimbursement?
  Response: Q4 midpoint implies ≈8,000 QoQ Shield growth; management will monitor catalysts (Quest/PathGroup, guidelines) and is confident in long-term targets; Reveal Ultra shows promising data and sensitivity but timing of launch and reimbursement remains undisclosed.

• Question from Casey Woodring (JPMorgan Chase & Co): KPIs on Shield (testing frequency per physician, new-screeners) and how Shield/Reveal gross margins are embedded in the updated 64%–65% guide?
  Response: Depth and breadth of ordering are increasing with very high adherence (>90% of orders yielding sample received); Q3 Shield non-GAAP gross margin was 55% (ASP ~ $900, cost < $500); Reveal ASP ~$600–$700 with cost < $500 and improving margins—both contributed to raised overall gross-margin guide.

• Question from Kyle Mikson (Canaccord Genuity Corp.): Could Reveal achieve ADLT status and breast Medicare coverage by year-end or is that a 2026 event? And does a competitor reporting higher advanced adenoma sensitivity materially threaten Shield?
  Response: ADLT discussions were delayed and management expects ADLT/breast reimbursement more likely early 2026; on competitor AA claims, management applauds scientific contribution but remains confident in Guardant's technology, data, and multi-year leadership position.

• Question from Luke Sergott (Barclays Bank PLC): Details on the OpEx step-up—where incremental spend is going, sales rep counts for Shield/oncology, and whether any costs can be pulled forward given launch success?
  Response: Incremental OpEx is primarily sales & marketing to scale Shield commercial infrastructure; management has ~250+ screening reps in the field and expects continued S&M ramp while keeping R&D and G&A relatively flat.

• Question from Daniel Brennan (TD Cowen): Does the >30% oncology volume guide contemplate a pullback from Guardant360 acceleration, and what's driving the year-to-date acceleration (share gains, consolidation, penetration, repeat testing)?
  Response: Q4 guide implies continued sequential and strong YoY oncology-volume growth (>30%); management attributes acceleration mainly to share gains and broader clinical utility/penetration, with longitudinal testing currently a smaller but growing contributor.

• Question from Daniel Arias (Stifel, Nicolaus & Company): Where is Reveal reimbursement in colorectal—what percentage of tests are getting paid (Stage II/III focus) and CMS traction?
  Response: CRC comprises roughly 50% of Reveal volume; Medicare reimbursement for CRC surveillance is being received (cited $1,640 rate) with good Medicare Advantage pull-through and improving commercial payer traction.

Contradiction Point 1

Shield Average Selling Price (ASP) Dynamics

It involves differing expectations regarding the decline of Shield's ASP over time, which can impact revenue projections and market positioning.

Can you explain the Shield ASP trends for the end of the year? - Bradley Bowers(Mizuho Securities USA LLC, Research Division)

2025Q3: The Shield ASP is expected to remain stable due to anticipated strengthening of Medicare Advantage rates, and the movement from Medicare Advantage rates to commercial reimbursement will impact ASP and is expected to decline as the commercial reimbursement is established. The $700 target for 2028 is anticipated due to increased commercial patients. - Michael Bell(CFO)

What's driving growth for Shield, and what are ASP expectations? - Puneet Souda(Leerink)

2025Q2: Shield's continued growth is driven by strong market demand and a productive sales team. The ASP increased significantly due to Medicare and Medicare Advantage reimbursement. - AmirAli Talasaz(CEO)

Contradiction Point 2

Reveal Test Order Frequency and Market Traction

It involves differing expectations regarding the growth of test order frequency for Reveal, which is crucial for revenue growth and market penetration.

Can you discuss Reveal's traction, progress in test frequency, and key catalysts for the next few quarters? - Patrick Donnelly(Citigroup Inc., Research Division)

2025Q3: Reveal is seeing increased test frequency due to improved workflows and investing in subsequent test orders. - Helmy Eltoukhy(CEO)

What factors will drive Reveal CRC surveillance reimbursement and ADLT status? - Subhalaxmi T. Nambi(Guggenheim)

2025Q2: Reveal is seeing traction with new patient starts and subsequent draws. - Michael Bell(CFO)

Contradiction Point 3

Oncology Growth and Market Strategy

It involves differing explanations for the growth and market strategy of the oncology products, which are crucial for understanding the company's market positioning and financial performance.

How has G360's growth been influenced by share gains and liquid-first paradigm shifts? - William Bonello (Craig-Hallum Capital Group LLC, Research Division)

2025Q3: The market is still in its early stages, expected to expand significantly with increased testing per patient. - Helmy Eltoukhy(CEO)

Can you share insights on the adoption of Guardant360 Liquid and interest in Shield among non-Medicare patients? - Mark Massaro (BTIG, LLC, Research Division)

2024Q4: Reveal's acceleration is expected across oncology products. - Helmy Eltoukhy(CEO)

Contradiction Point 4

Shield ASP and Medicare Advantage Impact

It involves differing expectations regarding the impact of Medicare Advantage rates on Shield's average selling price (ASP), which affects the financial outlook and pricing strategy for the company's core product.

Will Shield ASP decline steadily from $900 to $700 by 2028, and will there be any impact as ADLT pricing transitions post-initial phase by year-end? - Bradley Bowers (Mizuho Securities USA LLC, Research Division)

2025Q3: As Medicare Advantage rates are anticipated to strengthen, the Shield ASP is expected to remain stable. - Michael Bell(CFO)

What are your assumptions for G360 ASPs, Guardant360 Tissue, and Reveal surveillance adoption rates and year-end testing per patient? - Tycho Peterson (Jefferies)

2025Q1: Current G360 ASPs are in the range of $3,000 to $3,100, driven by Medicare Advantage and commercial reimbursement. We expect this ASP to continue. - Michael Bell(CFO)

Contradiction Point 5

Reveal Growth and Surveillance Setting Adoption

It pertains to the expected growth trajectory and adoption of Reveal in the surveillance setting, which is crucial for market penetration and revenue expectations.

Could you discuss the progress with Reveal, the advancement in test frequency, and the key catalysts for the next few quarters? - Patrick Donnelly (Citigroup Inc., Research Division)

2025Q3: Reveal is seeing increased test frequency due to improved workflows and investing in subsequent test orders. - Helmy Eltoukhy(CFO)

What is the best product fit for Reveal, and what are your growth expectations? - Puneet Souda (Leerink Partners LLC, Research Division)

2025Q1: Reveal is seeing adoption in the adjuvant setting due to rapid turnaround times and confidence in disease detection. We expect significant growth in breast and other indications. - Helmy Eltoukhy(CEO)