Natera (NTRA) Q1 FY26 earnings call: guidance and Q&A

Why was the full-year gross margin guidance only raised by one point despite a strong Q1, and were there any one-time factors in the Q1 SG&A jump?

Management stated the gross margin guidance is conservative, with potential upside, and that Q1 SG&A included approximately $25 million in non-cash, one-time balance sheet adjustments, which will not recur, giving confidence in the full-year SG&A guide.

“I'm roughly estimating those were worth about $25 million just in the quarter. So that's -- when you back that out and kind of normalize that, that's what gives me confidence around the SG&A guide for the rest of the year.”

asked by Douglas Schenkel · answered by Mike Brophy

How unusual was the 92% received-to-reported ratio in Q1, and what is the latest thinking on MolDX pan-cancer coverage versus single cancer approvals?

The 92% ratio is not unusual for a strong Q1 due to high volume at quarter-end, and is expected to normalize. For MolDX, the company has 7 additional histologies in submission, following a standard process, and expects these to cover the vast majority of remaining non-covered business, with a long-term ASP target of $2,000.

“Ultimately, we do think we're on a trajectory to get to around $2,000 ASP. And if you just multiply that by our volume today, that would be worth something like $750 million in volume and margin.”

asked by Daniel Brennan · answered by Steve Chapman

What share trends are observed for Fetal Focus and what is the competitive intensity in women's health? Also, what is the outlook for Latitude beyond CRC and its use for reflex testing?

Fetal Focus is performing very well, contributing to a strong Q1 in women's health with 63,000 unit growth. Latitude is doing well with CRC, with physicians preferring tumor-informed products but using Latitude for reflex when tissue is unavailable. The platform allows expansion to other histologies in the future.

“We added 63,000 units in women's health just between Q4 of 2025 and Q1 2026. So we think that's incredibly strong when we look at others in the women's health field.”

asked by Unknown Analyst · answered by Steve Chapman

Can you discuss the momentum for Signatera throughout Q1 and the key drivers for its continued sequential growth?

Signatera saw consistent growth from new patients and strong repeat rates from surveillance. Growth is driven by existing doctors expanding usage within and across histologies, new customers adopting the test, and the continuous release of strong clinical data.

“So what we've seen in Signatera is really consistent growth in new patients. And that was really continuing very strongly throughout the end of the quarter, which is a positive sign.”

asked by Patrick Donnelly · answered by Steve Chapman

How is the Xenith rare disease product ramping, and is it impacted by reimbursement challenges seen by others? Also, when can we expect data readout for the early cancer detection (ECD) trial?

Xenith is launching well with positive physician feedback and is not currently impacted by broader reimbursement challenges due to its early stage. The definitive ECD trial data will be read out in 2027.

“ACD data will be read out from the definitive trial in 2027.”

asked by Subhalaxmi Nambi · answered by Steve Chapman

What is the visibility and expected ramp for the CRC launch in Japan, and are there updates on momentum in biomarker states?

Japan's CRC launch is less than 6 months away, with regulatory approval and reimbursement expected soon. It has similar CRC diagnoses to the US and is expected to ramp quickly due to existing guidelines and a single national payer. Any action limiting prior authorization for covered services in biomarker states would be an upside for ASPs.

“Japan, we know has the same number of CRC diagnoses per year as what we see in the United States. And we've kind of been waiting to be in this position now where we're going to have regulatory approval we're going to have reimbursement and we're going to have our commercial launch.”

asked by Unknown Analyst · answered by Steve Chapman

How will the cost ramp for the early cancer detection (ECD) screening asset look, splitting R&D and commercial costs? Also, what is the momentum for Signatera in terms of same-store sales versus new additions?

ECD R&D costs are largely reflected in the current guide, with opportunistic acceleration possible. Commercialization will be incremental, leveraging existing channels and building out sales teams based on success. Signatera sees consistent growth from new patients and strong repeat usage from surveillance, with doctors expanding usage and new customers adopting the test.

“We will leg into this. We'll build that call point incrementally as we deliver volume. And I think our experience in the primary care call point via the OBG wine channel gives us a ton of experience in terms of understanding where to build first, right?”

asked by Kallum Titchmarsh · answered by Mike Brophy

Where are the new MRD reps added last year in terms of productivity, and how much more runway is there for growth from them?

The new MRD reps are estimated to be between 50% and 75% ramped, starting to become productive in Q1 and Q2, indicating more runway for growth. They contribute to new customer acquisition and cross-selling, supported by medical education and momentum in new areas like lymphoma.

“So I would say we're probably like between 50% and 75% ramped. I think they're really starting to become productive here kind of mid and through Q1 and turn in the quarter into Q2.”

asked by Casey Woodring · answered by Steve Chapman

How often does Natera encounter prior authorizations, and would their reduction be a tailwind? Also, is Signatera with phased variants launching clinically, and what is the early reception?

Prior authorizations are a tool payers use to limit payment, so any action to reduce them for covered services would be an upside for ASPs. An updated version of Signatera with phased variants is planned for launch later this year, with significant excitement from physicians and pharma, driving additional collaborations.

“We're planning to launch an updated version of Signatera genome-based assay that will include phased variants that's coming later this year, and we're looking forward to that.”

asked by Puneet Souda · answered by Solomon Moshkevich