Natera raises 2025 revenue guidance to $2.18B–$2.26B amid record Signatera growth and increased gross margin

Earnings Call Insights: Natera, Inc. (NTRA) Q3 2025

MANAGEMENT VIEW

* CEO Steve Chapman reported "We had a fantastic quarter. We generated $592 million in revenue, which is up about 35% over Q3 of last year." Chapman emphasized record growth for Signatera, noting the processing of 202,000 clinical MRD tests, which exceeded the previous quarter's record and represented "more than 21,500 units of growth compared to the second quarter."
* Chapman stated, "Gross margin took a big step up in Q3, coming in at 64.9%, which is almost 1.5 percentage points higher than we were just last quarter."
* Chapman announced an increase in 2025 financial guidance: "We are raising the revenue guidance by $160 million at the midpoint and now expect revenues in the range of $2.18 billion to $2.26 billion, which is a full reset of the prior revenue range."
* The company is "raising the gross margin guide to 62% to 64%" and expects to generate "roughly $100 million in cash for the full year."
* Chapman highlighted the expansion of the Fetal Focus product to cover over 20 genes, with positive initial feedback since the August launch.
* CFO Mike Brophy stated, "The balance sheet remains pristine with no permanent debt on the books and the cash flows from operations pushing our cash balance above $1 billion currently."
* Chapman indicated no major commercial expansions are planned, with SG&A "flat to down between Q2 and Q3."

OUTLOOK

* Chapman explained, "We are substantially raising our guide for free cash flow generation for the year, where we are now formally expecting to generate roughly $100 million in cash for the full year."
* Brophy provided guidance: "For the third time this year, we are completely resetting the revenue guide, now ranging from $2.18 billion to $2.26 billion on the strength of the revenues and the volumes we've seen so far this year. The gross margin guide, we are once again bumping up the bottom end of the range 100 basis points."
* Management expects OpEx growth of about 10% next year, "with a bias toward the R&D line."
* Chapman indicated, "We are now in a position to submit 7 new MolDx submissions before the end of the year this year, which we said can be worth around $250 million to $300 million of gross profit based on our run rate."

FINANCIAL RESULTS

* Natera reported $592 million in revenue for Q3 2025, representing 35% year-over-year growth.
* Gross margin reached 64.9%, nearly 1.5 percentage points higher than the previous quarter. Excluding true-ups, gross margins increased over a full percentage point compared to Q2.
* Chapman highlighted that Signatera ASPs are now at roughly $1,200.
* The company processed 202,000 clinical MRD tests in the quarter. There were about $55 million in true-ups, and days sales outstanding (DSOs) reached a record 49 days, down from 57 days in Q2.

Q&A

* Noah Kava, Jefferies LLC: Asked about the timing and feedback on the Fetal Focus test and reimbursement for the expanded panel. Chapman responded, "We've gotten great feedback from customers. And now R&D has gotten to the point where we're in a position where we can launch the broader panel, which was always part of our plan."
* Kava also questioned the path to NCC guidelines for Signatera. GM of Oncology and ECD & Chief Medical Officer Alexey Aleshin replied, "If you look at past precedents, typically, if something does go through the FDA process, it is included into the NCCN guidelines."
* Douglas Schenkel, Wolfe Research: Inquired about early cancer detection investments and performance standards. Chapman stated, "We didn't fully pull the trigger until we saw this most recent readout from the PROCEED study, which was, I think, a big milestone that we're waiting for. And now based off this... we're really full steam ahead on the FIND study."
* Daniel Brennan, TD Cowen: Asked about the sustainability of Signatera growth. Chapman said, "The growth at this point is really just coming across the board," and noted low single-digit penetration offers further expansion opportunity.
* Subhalaxmi Nambi, Guggenheim: Queried on differentiation of the assay and advanced adenoma detection. Aleshin indicated, "It's a multitude of factors and also just the dedication of our research team. This has been a multiyear process, and we've really approached this, I would say, from first principles."

SENTIMENT ANALYSIS

* Analysts focused on sustainability of growth, the impact of new product launches, and the pathway to broader reimbursement, showing a neutral to slightly positive tone with constructive questions.
* Management's sentiment was confident, highlighting phrases like "very pleased," "excited," and "strong confidence," and signaling ongoing momentum in both prepared remarks and Q&A.
* Compared to the previous quarter, the tone remained confident, but with greater emphasis on operational execution and increased guidance.

QUARTER-OVER-QUARTER COMPARISON

* Revenue guidance increased from a range of $2.02 billion–$2.1 billion in Q2 to $2.18 billion–$2.26 billion in Q3.
* Gross margin guidance rose from 61%–64% to 62%–64%.
* The number of clinical MRD tests processed increased from 189,000 in Q2 to 202,000 in Q3.
* Signatera ASPs increased from roughly $1,175 to $1,200.
* Management maintained a confident tone, with a shift from investment ramp-up to leveraging scale and operational efficiency.
* Analysts’ focus shifted from new patient volumes and product launches to specifics of reimbursement, gross margin expansion, and competitive positioning.

RISKS AND CONCERNS

* Chapman noted onetime expenses accumulating to around $60 million this year and a small increase in R&D to support MolDx coverage.
* Management acknowledged potential variability in gross margin and volume quarter-to-quarter but affirmed long-term targets.
* Chapman indicated no major commercial expansions are planned, suggesting a focus on operational leverage rather than aggressive scale-up.

FINAL TAKEAWAY

Natera management highlighted a quarter of record revenue, accelerated gross margin improvement, and substantial upgrades to 2025 guidance, driven by robust Signatera growth and positive uptake of the expanded Fetal Focus panel. With momentum in product performance, operational efficiency, and evidence generation, the company signaled continued financial strength and confidence in achieving long-term growth and margin targets.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/ntra/earnings/transcripts]

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