Guardant Health Q2 2025 Earnings Report

Guardant Health EPS Results

• Actual EPS: -$0.44
• Consensus EPS: -$0.52
• Beat/Miss: Beat by +$0.08
• One Year Ago EPS: -$0.84

Guardant Health Revenue Results

• Actual Revenue: $232.09 million
• Expected Revenue: $211.19 million
• Beat/Miss: Beat by +$20.90 million
• YoY Revenue Growth: +31.00%

Guardant Health Announcement Details

• Quarter: Q2 2025
• Date: 7/30/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, July 30, 2025
• Conference Call Time: 4:30PM ET

Guardant Health (NASDAQ:GH) is a precision oncology company specializing in blood-based cancer diagnostics. Founded in 2012 and headquartered in Redwood City, California, the company develops non-invasive tests that use circulating tumor DNA (ctDNA) to profile genomic alterations in patients with solid tumors. Guardant Health’s mission is to advance cancer care by providing actionable data to clinicians, pharmaceutical partners and researchers worldwide.

The company’s flagship product, Guardant360, is a next-generation sequencing (NGS) assay designed to detect mutations, copy number variations and select fusions in more than 70 cancer-related genes. Guardant360 CDx has received regulatory approval as a companion diagnostic for targeted therapies, while Guardant Reveal offers a blood-based solution for minimal residual disease (MRD) monitoring in early-stage colorectal cancer. Guardant Health is also developing its LUNAR platform for multi-cancer early detection through screening applications.

Guardant Health operates CLIA-certified, CAP-accredited laboratories in the United States and has expanded service offerings across Europe and Asia through partnerships and regional laboratory certifications. The company collaborates with pharmaceutical and biotechnology firms on clinical trials to accelerate drug development and optimize patient selection for targeted therapies. Its commercial and research testing services support oncology practices, academic institutions and life science organizations globally.

The company was co-founded by Helmy Eltoukhy, who serves as Chief Executive Officer, and AmirAli Talasaz, President and Co-founder. Under their leadership, Guardant Health has grown its product pipeline, secured regulatory clearances and forged strategic alliances to advance the use of liquid biopsy in precision oncology.

Guardant Health Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Q2 revenue rose 31% year-over-year to $232.1 M, driven by strong performance across oncology, biopharma, and screening businesses.
• Positive Sentiment: Oncology revenue increased 22% to $158.7 M with test volumes up 30%, led by accelerating Guardant360 Liquid growth and solid Reveal contributions.
• Positive Sentiment: Shield CRC screening generated $14.8 M in revenue on 16,000 tests, achieving an ASP above $900 and non-GAAP gross margin of 48%, supporting an expanded commercial build-out.
• Positive Sentiment: Guardant360 Tissue ASP reached ~$2,000—hitting the 2028 target three years early—bolstered by RNA/methylome enhancements and higher Medicare reimbursement.
• Neutral Sentiment: Clinical validation for Shield V2 multi-cancer detection is complete and the NCI Vanguard trial is underway, but an FDA review timeline and commercial launch date remain unspecified.

Presentation

[Operator]

Good afternoon, and thank you for attending the Guardant Health Q2 2025 earnings conference call. My name is Jason, and I'll be the moderator today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to pass the conference over to your host, Zarak Khurshid.

[Zarak Khurshid, VP of Investor Relations at Guardant Health]

Thank you. Earlier today, Guardant Health released financial results for the quarter ending June 30th, 2025. Joining me today from Guardant are Helmy Eltoukhy, Co-CEO; AmirAli Talasaz, Co-CEO; and Mike Bell, Chief Financial Officer. Before we begin, I'd like to remind you that during this call, management will make forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated.

[Zarak Khurshid, VP of Investor Relations at Guardant Health]

This call will also include a discussion of non-GAAP financial measures, which are adjusted to exclude certain specified items. Additional information regarding material risks and uncertainties, as well as the non-GAAP financial reconciliations to most directly comparable GAAP financial measures are available in the press release Guardant issued today, as well as in our 10-K and other filings with the SEC. Guardant disclaims any intention or obligation to update or revise financial projections and forward-looking statements, whether because of new information, future events, or otherwise, except as required by law. The information in this conference call is accurate only as of the live broadcast. With that, I would like to turn the live call over to Helmy.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

Thanks, Zarak. Good afternoon, and thank you for joining our second quarter 2025 earnings call. Starting on slide three. Q2 marked another exceptional quarter for Guardant. We continued to build momentum across Oncology, Biopharma, and Screening business lines, including accelerating therapy selection and MRD volume growth, record Biopharma sales, and quickly scaling Shield volumes and revenues. Product innovation built in Smart Liquid Biopsy, combined with strong commercial execution, were integral to the strong performance in the second quarter. I'll walk through some of the key highlights of the quarter in just a moment. First, as always, I would like to start with a powerful story that demonstrates the impact our tests can have on patients around the world. Last August, a 46-year-old woman was diagnosed with Stage 3 endometrial carcinoma.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

Once it became clear that her cancer was progressing, her oncologist ordered a Guardant360 Tissue test to help identify potential treatment options beyond the standard of care. Guardant360 Tissue had just gone through a major upgrade to incorporate comprehensive DNA and RNA, and oncologists ordered both results. The test identified a RET fusion, an actionable biomarker that made her eligible for a targeted therapy she likely would not have received based on her initial diagnosis alone. I'm glad to be able to share that she has responded positively to this treatment and is doing well today. This case is a powerful example of how comprehensive molecular profiling through our recently upgraded Guardant360 Tissue test can help guide treatment decisions and improve patient outcomes. Turning to top-line performance in slide four.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

Q2 revenue grew 31% year-over-year to $232 million, with strong performance across our Oncology, Screening, and Biopharma & Data businesses. Starting with our Oncology business in slide five. Roughly 1/2 of the overall year-over-year revenue growth in Q2 came from the Oncology business, with revenue increasing 22% to $159 million. Oncology volumes increased 30% year-over-year to approximately 64,000 tests in the second quarter, with the majority of growth driven by Guardant360 Liquid, again closely followed by strong contribution from Reveal. Looking more closely at some of the recent highlights within our Oncology business on slide six. We saw continued volume growth across all oncology tests this quarter, with particularly strong performance from Guardant360 Liquid, where year-over-year growth accelerated for the fourth consecutive quarter and was over 20% in Q2.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

We continue to believe that the steady cadence of new app introductions powered by Smart Liquid Biopsy has been instrumental to the accelerating growth profile of Guardant360 Liquid. In late May, as part of the lead-up to ASCO 2025, we introduced 11 groundbreaking Smart Liquid Biopsy applications for Guardant360 Liquid, significantly expanding the clinical utility and further extending our technical leadership in the liquid CGP market. I'll walk through some of these applications in more detail shortly. Guardant360 Tissue continues to be our second fastest-growing oncology product and is even better positioned today to accelerate following the major upgrade in April, which we believe make it a best-in-class product.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

As a reminder, the recent improvements expand the panel to include RNA and broad methylome analysis powered by our Smart Liquid Biopsy platform and enable readouts with 40% less slides than the industry norm, which we believe is an important differentiator. We are also excited to report for the first time that Guardant360 Tissue ASP was approximately $2,000 in Q2, achieving our 2028 target three years ahead of schedule. For Reveal, we made great progress with data generation and publications. We recently submitted our Reveal breast cancer data package to MolDX for Medicare reimbursement, and the first publication of immuno-oncology therapy monitoring data on Reveal was published this week. In May, we continued to augment our offering with the launches of Guardant Hereditary Cancer testing and a suite of immunohistochemistry or IHC tests.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

These additions bring us closer to becoming a one-stop shop for oncologists, providing insights across the patient journey. Turning to slide seven. At the annual ASCO meeting in early June, results from the landmark SERENA-6 trial were sponsored by AstraZeneca, were featured in a high-profile plenary session. This was the first pivotal trial to use a ctDNA-guided approach to detect and treat emerging resistance in first-line therapy ahead of disease progression in breast cancer. Guardant360 was the exclusive companion liquid biopsy used in the trial for this monitoring application. Feedback from KOLs during and after ASCO was incredibly positive, and we look forward to camizestrant potentially becoming a new option for breast cancer patients. This important new paradigm involving frequent Guardant360 testing in order to quickly detect the emergence of resistance mutations has potential to change clinical practice and improve outcomes for patients with advanced breast cancer.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

With a prevalent pool of approximately 40,000 patients in the U.S., this new application of Guardant360 has the potential to drive significant incremental Guardant360 revenue in 2026 and beyond. Moving on to slide eight. We have built a powerful real-world evidence platform utilizing over 100,000 genomic and broad epigenomic profiles across more than 50 cancer types. By combining the multi-omic profiling capabilities of our Infinity platform with the analytical power of our InfinityAI learning engine, we are driving the development of first-of-their-kind clinical applications that are setting a new standard in precision oncology. Turning to slide nine. Since July of last year, Guardant360 has delivered accelerating growth each quarter, fueled by our Guardant Infinity Smart Liquid Biopsy platform. In Q2 alone, we launched nearly a dozen groundbreaking new apps, greatly expanding the utility of Guardant360 Liquid.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

The latest wave of new apps include complementary genomic features, which add an even higher resolution view of tumor biology, helping healthcare providers to make smarter, more personalized treatment decisions even when tissue isn't available for analysis. Among the many newly launched applications are cancer subtype classification using tumor-specific methylation signatures to complement enhanced standard testing methods; cancer site of origin identification when the primary site is unknown, guiding better diagnosis and therapy; advanced negative prediction to confidently identify wild-type patients; and pharmacogenomic profiling to identify genetic variations that impact the safety and efficacy of commonly used anti-cancer therapies. Shifting gears to Reveal in slide 10, where we are the leader in tissue-free MRD. Over the last few months, we have continued to generate and publish compelling data on Reveal across a number of cancer types.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

As I mentioned earlier, the Reveal breast reimbursement submission has been made to MolDX, and the IO monitoring study just published will support reimbursement submission for this application in the near future. Starting with slide 11. We are excited to announce a new breast cancer publication in ESMO Open highlighting the performance of Reveal. This retrospective study evaluated 95 patients who were diagnosed with early-stage ER+/HER2- or triple-negative breast cancer undergoing chemotherapy prior to surgery. Notably, nearly 40% of patients had minimal or no residual tumor following neoadjuvant chemotherapy, demonstrating the value of Reveal's tissue-free approach. Reveal showed strong performance with 100% sensitivity for distant recurrence in patients with ER+/HER2- breast cancer, 100% specificity, and 100% positive predictive value for relapse, and an overall sensitivity of 71%.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

These results, combined with the data recently published in Clinical Cancer Research, further validate Reveal's potential to transform neoadjuvant and post-treatment surveillance strategies with the ultimate goal of improving patient outcomes. Moving on to slide 12. I am proud to share the RADIOHEAD Reveal immuno-oncology monitoring study, which involved 521 Stage 4 pan cancer patients treated with standard of care immunotherapy, was published in Cancer Research Communications, a journal of the American Association for Cancer Research. This study demonstrated that any decrease in Reveal tumor fraction signal in the study was significantly associated with improved patient outcomes. Additionally, Reveal identified non-responders more than three months and as many as five months before disease progression was visible on standard imaging. Turning to slide 13. At this year's ASCO annual meeting, data from the largest study to date using ctDNA in Stage 3 colon cancer further validated the clinical utility of Reveal.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

This phase III study involved over 2,000 patients evaluated with a median follow-up of 6.1 years, showed that ctDNA detected after surgery and before chemotherapy is a powerful predictor of recurrence and survival. Among patients with detectable ctDNA, 63% experienced recurrence within three years, compared to just 15% of those without detectable ctDNA. These findings strongly support the routine use of Guardant Reveal to stratify patients by risk, inform adjuvant therapy decisions, and ultimately improve outcomes. We have made strong progress over the last few months in MRD. Reveal volume growth accelerated in the second quarter on a year-over-year basis, consistent with our expectations, and we continue to have an extensive pipeline of clinical cohorts to further support clinical utility and analytical validity for Reveal. Turning now to slide 14. Our Oncology business is well-positioned for durable growth, supported by continued CGP penetration, favorable ASP dynamics, and international expansion.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

Guardant360 Liquid and Guardant360 Tissue are seeing increased adoption driven by the recently expanded genomic and epigenomic breadth of our platform, which is unlocking greater clinical utility and driving share gains. With our redoubled commercial focus on Reveal following major COGS improvements in Medicare CRC surveillance reimbursement earlier this year, the business is primed for strong growth in MRD. Looking more closely at some of the recent highlights within our Biopharma & Data business in slide 15. We delivered a record quarter for our Biopharma business, achieving all-time highs in both volume and revenue, with second quarter revenue growing 28% year-over-year. We continue to deepen our relationship with large pharma and signed two new companion diagnostic deals in Q2. We continue to have a robust and growing pipeline of partnerships, and near-term revenue visibility remains high.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

Of note, our Biopharma volume mix continues to skew towards methylation analysis on Infinity, powered by our Smart Liquid Biopsy platform. With that, I will now turn the call over to AmirAli for an update on Screening.

[AmirAli Talasaz, Co-CEO at Guardant Health]

Thanks, Helmy. Moving on to slide 16. We delivered $15 million of Shield testing revenue in Q2, driven by approximately 16,000 tests. We are pleased to see continued strong traction for Shield in the third full quarter of commercial launch. Shield continues to generate strong enthusiasm from both patients and physicians, with high adherence rates that continue to be over 90%, meaning we receive blood samples for more than 90% of ordered cases. This demonstrates the simplicity of Shield as a routine blood test for CRC screening that can be implemented into standard PCP care. We also continue to observe strong depth of ordering per physician. Moreover, we've been encouraged with the momentum in sales rep productivity in the field, although it's still early days in our commercial journey, and the average tenure of our sales reps is less than eight months.

[AmirAli Talasaz, Co-CEO at Guardant Health]

Given our performance this quarter across revenue, volume, and gross margin, we are further accelerating the build-out of our commercial infrastructure and now expect to surpass 250 sales reps by year-end to support this growth as we go to 2026. Moving on to slide 17. In late May, we were very encouraged to see National Comprehensive Cancer Network, or NCCN, update its CRC screening guidelines to include Shield. The new NCCN guidelines place Shield in Category 2A, which is the same category recommendation as the other first-line screening modalities. This represents the first national guideline recommendation for Shield and, in our view, paves the way for improved commercial coverage and patient access. This also supports our confidence that Shield will be included in other national CRC screening guidelines in the future. Now, turning to slide 18 to take a closer look at Screening highlights for the second quarter 2025.

[AmirAli Talasaz, Co-CEO at Guardant Health]

Starting with Shield CRC. As I mentioned earlier, we are very pleased with the high patient adherence, strong depth of ordering per physician, and the productivity of our reps in the field. We are also very excited to see Shield is now a guideline-recommended screening test by the NCCN. Along with this strong momentum, Shield was recently named a winner of Fast Company's 2025 World Changing Idea Awards, an award that recognizes innovative companies and projects addressing the world's most urgent challenges. Beyond CRC, we made meaningful progress with Shield multi-cancer detection, MCD, in the second quarter. As a reminder, we presented the clinical validation of Shield MCD test at AACR and ASCO this year. This momentum continued when Shield MCD received breakthrough device designation from the FDA, making an important milestone for us. Moving on to slide 21.

[AmirAli Talasaz, Co-CEO at Guardant Health]

As a reminder, our goal has always been to detect cancer early, when it's most treatable. We developed our Shield as a platform capable of multi-cancer detection, with CRC screening representing just the first indication for Shield, given it has an established regulatory and reimbursement pathway. While we are encouraged by the strong traction we are seeing for Shield CRC, we are even more excited about broadening the impact of Shield across multiple cancer types. Moving on to slide 22. In early January, we announced Shield's selection for inclusion in the National Cancer Institute's Vanguard Study, which is a 24,000-patient pilot study to evaluate the use of MCD tests. As a reminder, Shield was one of only two technologies selected through a highly-competitive process.

[AmirAli Talasaz, Co-CEO at Guardant Health]

We are pleased to share the commencement of NCI Vanguard Study just a few weeks ago, and we have already started delivering MCD results to physicians and their patients through this trial. The initiation of this study establishes the clinical and operational readiness for Shield MCD and marks an important milestone for the Shield platform. We are looking forward to broadening access to Shield MCD beyond the scope of the Vanguard Study in the near future. Looking ahead, Shield V2 continues to be a very active program for us, and we remain confident about the potential inclusion of Shield in American Cancer Society or ACS guidelines. With that, I will now turn the call over to Mike for more detail on our financials.

[Mike Bell, CFO at Guardant Health]

Thanks, AmirAli. Turning to slide 23. I'll now discuss some select financial highlights for the quarter ending June 30th, 2025. I'll refer to year-over-year growth rates unless otherwise noted. Second quarter total revenue grew 31% to $232.1 million, driven by strong performance across all our key revenue lines: Oncology, Biopharma & Data, and Screening. Starting with our Oncology business. Oncology revenue grew 22% to $158.7 million, primarily driven by another quarter of accelerated volume growth.

[Mike Bell, CFO at Guardant Health]

As a reminder, Oncology volume consists of our Guardant360 Liquid and Tissue therapist selection test and our Reveal and response monitoring test. Oncology volume grew 30% to approximately 64,000 tests in Q2, with the majority of growth driven by Guardant360 Liquid, closely followed by strong contribution from Reveal. Guardant360 Liquid year-over-year volume growth accelerated for fourth consecutive quarter and was over 20% in Q2. Reveal year-over-year volume growth also accelerated in Q2 and continues to be our fastest-growing Oncology product. We also continue to see strong Oncology ASPs in Q2. Guardant360 Liquid ASP was in the range of $3,000-$3,100 in the second quarter of 2025, in line with the prior quarter. Guardant360 Tissue ASP increased to approximately $2,000 in Q2, which means that we have reached our 2028 Tissue ASP target three years ahead of schedule.

[Mike Bell, CFO at Guardant Health]

This has been driven by the increase in Medicare pricing from $3,140 to $3,500 at the start of the year, good progress with commercial payers, and incremental reimbursement related to the recently launched tissue RNA feature. We've been very encouraged by the attachment of RNA to our Guardant360 Tissue test, and we want to highlight that we do not count tissue RNA separately from Guardant360 Tissue in our reported volumes. Reveal ASP continues to be in a range of $600-$700 following Medicare CRC surveillance coverage earlier in the year. After sales revenue was consistent with normal expected levels in Q2 and did not provide a material upside in the quarter. Finally, note that we do not include Guardant Hereditary Cancer test or IHC volumes in our reported volumes, and we expect minimal revenue contribution from these new offerings throughout 2025.

[Mike Bell, CFO at Guardant Health]

Our Biopharma & Data business performed incredibly well again in the second quarter, with record revenue totaling $56 million, an increase of 28%. Our Biopharma pipeline continues to shape up solidly, driven by Guardant Infinity and additional companion diagnostic partnerships signed in the quarter, all of which add to our confidence in both the short-term and long-term business. Finally, we continue to see increasing revenue contribution from Shield, with Screening revenue totaling $14.8 million in Q2, generated from the 16,000 Shield tests that we reported in the quarter. Turning to slide 24. We're extremely pleased to report that we're making great progress with Shield non-GAAP gross margin, which increased to 48% in Q2 compared to 18% in Q1 2025, and 2% in Q4 2024. This was driven by continued improvements in both ASP and COGS.

[Mike Bell, CFO at Guardant Health]

Shield ASP was over $900 in Q2, which represents a significant increase over the ASP of approximately $600 in Q1. The main drivers of ASP improvement were the increase to our Medicare rate from $920 to $1,495, following the receipt of ADLT status, which became effective on April 1, and the continued high mix of reimbursable test volumes. It should also be noted that the Shield ASP reflects the strong reimbursement that we're receiving from Medicare Advantage payers. Equally pleasing is that Shield non-GAAP cost per test further reduced in Q2 and is now less than $500. This continued improvement is driven by increased Shield volume and the excellent performance of our operations team in maintaining rigorous cost controls and driving efficiency gains.

[Mike Bell, CFO at Guardant Health]

Similar to last quarter, we plan to reinvest the incremental Shield gross profit we generate back into the sales and marketing line to accelerate the Screening commercial infrastructure build-out. We continue to be very proud of the financial profile that Shield has demonstrated in such a short period of time. Turning to slide 25. Our non-GAAP gross profit was $153.8 million, an increase of $47 million or 44% year-over-year. Our non-GAAP gross margin of 66% was above our expectations in the second quarter of 2025 and was a significant improvement compared to 60% in the second quarter of 2024. The improvement in gross margin is primarily a result of improved Oncology ASP, as well as the significant turnaround in gross margins for Reveal and Shield, which were both gross margin negative in Q2 2024 and which are now both gross margin positive.

[Mike Bell, CFO at Guardant Health]

As we noted last quarter, Reveal cost per test has reduced from over $1,000 in 2024 to less than $500 in 2025. Non-GAAP operating expenses were $215.3 million in the second quarter of 2025, an increase of 20% and in line with our expectations. Both non-GAAP R&D and G&A expenses in the quarter were approximately flat compared to prior year, which reflects the operating leverage that we're achieving throughout the business. Non-GAAP sales and marketing expense increased 45% to $107.8 million in the second quarter of 2025. This increase was due to the ongoing Screening commercial build-out, as well as continued investment in Oncology sales and marketing. Adjusted EBITDA loss was $51.9 million for Q2 2025, an improvement of $10 million compared to a loss of $61.9 million in Q2 2024.

[Mike Bell, CFO at Guardant Health]

We continue to be focused on cash management and reducing our burn in 2025 versus 2024. Q2 2025 free cash flow burn was $65.9 million, compared to $99.1 million in the prior year period. We ended the quarter with approximately $735 million in cash and cash equivalents, and restricted cash. Moving to slide 26 for our outlook and assumptions for the full year 2025. We're increasing our full year 2025 revenue guidance for the second time this year to be in the range of $915 million-$925 million, representing growth of approximately 24%-25% compared to 2024, and an increase of $35 million compared to our prior range of $880 million-$890 million. We now expect Oncology revenues to grow approximately 20% year-over-year in 2025, compared to our prior guidance of 18%.

[Mike Bell, CFO at Guardant Health]

The increase is based on stronger than expected Guardant360 Liquid and Reveal volumes in Q2 2025, as well as higher Oncology volume now projected for the remainder of the year. For the full year 2025, we now expect total Oncology volume to grow greater than 27%, versus our prior expectation of greater than 25%. We continue to expect our Biopharma & Data business to perform well throughout 2025, and now expect mid-teens revenue growth compared to our prior expectation of low double-digit growth. We are also raising our full year 2025 Shield revenue guidance again this quarter to $55 million-$60 million from our prior guidance of $40 million-$45 million. This increase is largely driven by higher volume, where we now expect 68,000-73,000 tests versus our prior guidance of 52,000-58,000 tests.

[Mike Bell, CFO at Guardant Health]

Our Shield revenue guidance assumes an ASP of approximately $800 for the second half of 2025, slightly lower than our Q2 ASP, as we anticipate potential changes to the mix of Medicare and commercial pay tests as we scale the business. With the significant improvements to gross margins that we've generated during the first half of the year, we're raising our full-year non-GAAP gross margin guidance to be in the range of 63%-64%, compared to the previous range of 62%-63%. As we've previously outlined, we plan to reinvest any incremental Screening gross profit we generate throughout the year back into the business to accelerate our commercial infrastructure build-out.

[Mike Bell, CFO at Guardant Health]

As a result of improved Shield volume and gross margin, we're increasing our sales and marketing efforts and now expect 2025 non-GAAP operating expenses to be in the range of $840 million-$850 million, representing an 11%-12% increase compared to 2024. We continue to expect full-year non-GAAP R&D and G&A expenses to be relatively flat compared to 2024. Lastly, our commitment to cash burn reduction each year in order to reach company-wide cash flow breakeven in 2028 is unchanged. For full-year 2025, we still expect free cash flow burn to be in the range of $225 million-$235 million, an improvement compared to $275 million for 2024. We continue to expect our cash burn in 2025 to consist of approximately $200 million related to Screening as we scale our Shield business and maximize our first-mover advantage.

[Mike Bell, CFO at Guardant Health]

Significantly excluding Screening, we continue to expect the remainder of the business to burn approximately $25 million-$35 million during the year, and to reach free cash flow breakeven in the fourth quarter of 2025. Moving on to slide 27. At the start of the year, we outlined an ambitious pipeline of catalysts, it's a testament to our team's strong execution that we've delivered on nearly all of them just halfway through the year. Finally, turning to slide 28. We'll be hosting an Investor Day on Wednesday, September the 24th in New York City. We look forward to sharing a deeper dive across our business. Please reach out to investors@guardanthealth.com for more information. With that, we'll now open the call to questions.

[Operator]

If you would like to ask a question, please press star followed by one on your telephone keypad. We are limiting questions to just one question per person. Our first question is from Mark Massaro from BTIG. Your line is now open.

[Mark Massaro, Analyst at BTIG]

Hey, guys. Congratulations on the strong beat and raise. Helmy, the first one's for you. Clearly you guys are doing a really great job in Guardant360 Liquid. You've raised the volume guidance for the year. You talked about SERENA-6. What I'm curious about is, did you see any benefit from The New England Journal of Medicine publication, perhaps in Q2? Can you give us a sense for the likelihood that you can continue to drive the interval of testing in Guardant360 in breast cancer?

[Helmy Eltoukhy, Co-CEO at Guardant Health]

Thanks for the question. Happy with the quarter, obviously, and happy with the performance of our core business. I think as we've said, this quarter we saw something like over 20% growth for Guardant360, which is just fantastic to see this kind of growth of a product that's been in the market for so long. I think what we're seeing right now is really, I think a testament to the product market fit we've achieved with our Infinity Smart Liquid Biopsy platform. I think there's a lot more juice to squeeze. If there was SERENA-6 impact, it was very minimal.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

This quarter, we think we see the majority of that once and if the drug is finally approved. We obviously are very excited about that in terms of the potential for adding significantly more testing opportunities to the liquid biopsy space. I think this really shows how big the CGP liquid biopsy market is. I think we're still in the early innings of converting users to potentially just one test or to the first test from a liquid biopsy space. We have so much room to run, I think so many years of growth ahead of us as we start getting this sort of monitoring paradigm really, kind of fully realized by the market.

[Operator]

Our next question is from Puneet Souda with Leerink. Your line is now open.

[Puneet Souda, Analyst at Leerink]

Hi, guys. Thanks for the questions here. Congrats on a really strong quarter. If you don't mind, I'll try to squeeze my questions into one. First, Shield growth is obviously very impressive. Can you talk a little bit about what's driving that, primarily among the PCP practices? Is it NCCN? Is it the ramp in the sales force? Wondering if you can give the sort of an ASP number. It seems to be higher than the $800 that you had projected. Wondering where that's going to land. Around Shield, if I may also ask, Shield V2 is a big focus for investors. We were hoping for data by now. Any updates on that data? I'll pause there. I have more questions, but I'll follow up with Helmy later.

[AmirAli Talasaz, Co-CEO at Guardant Health]

Thanks, Puneet, for a good question. We are very excited with the Shield commercial performance. We are continuing to see a very strong pull by market. When physicians are becoming aware of this test, they're getting access to this test as we are scaling up our footprint in the field in terms of reps, we are seeing a very strong demand. I think this beat and raise is really an endorsement of the entire productivity that we are seeing in this newly formed sales team that we have kind of assembled. We are very excited about it, and looking forward to see what we can do in the second half of the year. Maybe I go to Shield V2, then I give it to Mike to talk about the ASP.

[AmirAli Talasaz, Co-CEO at Guardant Health]

As I mentioned in the prepared remarks, V2 is a very active program for us. A lot of work has gone into it, and still it's ongoing, and we'll see what happens. Mike?

[Mike Bell, CFO at Guardant Health]

Yes, I can add on the ASP. We saw a really good uplift in Shield ASP in the quarter. We went from in Q1, ASP was just over $600, in Q2, that increased to over $900. The main driver there obviously was that the ADLT status became effective on the 1st of April, our Medicare rate increased from $920 to $1,495. We are also seeing very strong Medicare Advantage reimbursement that is coming through now from pretty much all of the payers, that is helping to really stabilize that ASP. I think when we look at the back half of the year, we said it in the prepared remarks, we would expect our ASP for the next six months to be around $800. That would be slightly lower than Q2, really that is a function of the mix.

[Mike Bell, CFO at Guardant Health]

As we continue to scale, we think we'll see more of the mix move from Medicare Advantage onto commercial. We're just allowing for that over the next six months. I think ASP story on Shield has been really positive across this quarter.

[Operator]

Our next question is from Dan Brennan with TD Cowen. Your line is now open.

[Dan Brennan, Analyst at TD Cowen]

Great. Thank you. Thanks for the question. Just one on Guardant360, since it's doing so well, and it's your biggest business. Could you give a little color in terms of where the growth is coming from? Do you feel that you're seeing better penetration, maybe locally or big AMCs? Do you feel like it's more just penetration of the existing market, or do you feel like maybe you're taking share? The other factor is, how many of you discuss a lot of the benefits of Smart Liquid Biopsy in terms of the performance? Is that resonating at the oncologist level? Is that really a sale into the hospital administrator? Just trying to unpack a little bit your growth versus maybe the other players in the broader market. Thank you.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

That's a great question. When we dissect the numbers, it really is a broad-based growth. We're seeing more oncologists than ever before ordering every single month. That continues to grow pretty dramatically over the last few quarters since we launched Smart Liquid Biopsy. We're seeing higher depth. In those same accounts, we're seeing a much higher average of number of Guardant360 tests per month. That's really exciting. We know that is coming from just the increased utilization of the test, the growing market and use cases of liquid biopsy.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

Also significant share gains as well, which is great to see. I think as I alluded to before, we have a test that truly has achieved much greater product market fit than anything out there. When I talk about these features, these features are really resonating at the oncologist level. I was at ASCO. I can tell you that many of the key opinion leaders we work with, many academic center oncologists are really excited about these features, but these features resonate at the community level as well. The fact that we can do what sometimes tissue can't, the fact that we can see how the tumor is evolving from a subtype point of view, which has serious implications in terms of treatment decisions.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

We can see those patients who maybe may qualify for certain drugs that many other tests out there can't, from immunotherapies to PARP inhibitors. This is just the beginning in terms of what we're able to do. I can tell you that the pipeline we have of new applications and new apps that we're going to launch over the coming quarters is probably even more exciting than what we've launched today. Many things I think if I told you we could do three years ago, most oncologists, most scientists would have said is science fiction. That is really, I think, the power of this platform in terms of what we can do. You're starting to see it in the numbers on both the Biopharma side and now the clinical side.

[Operator]

Our next question is from Tycho Peterson with Jefferies. Your line is now open.

[Tycho Peterson, Analyst at Jefferies]

Thanks. On Shield, congrats on the Vanguard enrollment. I'm just wondering if you can walk through next steps to getting Shield marketed as an MCD test. Do you have to wait for data from the ongoing lung study or an interim Vanguard readout? How do you feel about inducement concerns? That seems to be a bit of a debate in the investing community. Can you maybe just talk through your view on the risk around USPSTF? Obviously, if the whole panel gets replaced, that could throw a monkey wrench in things. Thanks.

[AmirAli Talasaz, Co-CEO at Guardant Health]

We are very excited with this progress we had on the R&D side. Now, Shield MCD is clinically validated. We are not waiting for any other test to be a clinical-grade test. We spent some energy and effort to make it operationally ready for patient testing. Now, that we are started, the Vanguard Study lab are running these samples. We are reporting out these clinical reports for patient management within the Vanguard Study. From those aspects, we are actually ready. It's not that we are waiting for any kind of pivotal study readout to come before we take any action on broadening access for Shield MCD. As I mentioned in the prepared remarks, hopefully we can have some conversation about it in the near future. Stay tuned about it.

[AmirAli Talasaz, Co-CEO at Guardant Health]

In terms of some of the, I think the matters you mentioned, we are very above the laws. We are here to help the patients, never we are going to do something which is against the laws. I think the way I read about it is the tremendous opportunity that we have with Shield that excites us, and I think this over time would increase USPSTF very quickly. We are monitoring the situation very closely. Yes, looks like the whole panel appears to get into the process to get replaced. The good success that we had with our Shield in the market right now with a very healthy gross margin, and it's very big greenfield, which is in front of us. We had a lot of actually opportunity in front of us to mine, build this business while we are waiting for task force guideline inclusion.

[Operator]

Our next question is from Subbu Nambi with Guggenheim. Your line is now open.

[Subbu Nambi, Analyst at Guggenheim]

Hey, guys. Thank you for taking my question. You had recently said that Reveal was at approximately 1.7 tests per patient. How much do you expect the CRC surveillance reimbursement to drive this number upwards in the near term in 2026? Then in the long run, what do you think this number could look like? I noticed in the capital slide you don't have Reveal ADLT listed. I don't think that was on the slide before, I'm curious if you have any updates there. Thank you.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

Good questions. We're already seeing it drive higher with some of the progress we've made. We're seeing not only great traction, as you said, Reveal is our fastest-growing product on the Oncology side, it's really only second to the Shield across the company. We're really excited about the progress we've made with the acceleration there. Really good traction with new patient starts, but even more so with subsequent draws, which is where we hadn't been pushing quite as much. Now, that we've turned a lot of that machinery on, it's been exciting to see how much we can start to lean into that and really drive that volume.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

I think next few quarters and certainly into 2026, we have high expectations for Reveal, and we can certainly get that number, I think up significantly in terms of number of tests per patient. In terms of ADLT, there was never on the milestone chart there, but it's certainly something we've submitted for and we are waiting for a decision, basically. Hopefully, over the next quarter or so, we'll know the resolution. I think we're very positive. We know that the test qualifies for ADLT, so hopefully it will come back as a positive.

[Operator]

Our next question is from Kyle Mikson with Canaccord. Your line is now open.

[Kyle Mikson, Analyst at Canaccord]

Hey, guys. Thanks for the questions. Congrats on a great quarter. Tell me, why are you confident that Reveal Medicare reimbursement for breast is going to be obtained faster than CRC, including surveillance that, for colon, that took a while. Second, for AmirAli, NCCN inclusion was nice, but is that having an impact on Shield volumes, or do we need ACS and USPSTF? On the point of USPSTF from earlier, with the panels replaced with people that clinicians don't really trust, is this going to make that milestone for you guys maybe less important? Thanks.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

A lot of questions. In terms of Reveal Medicare coverage, the second time we got for CRC surveillance was actually pretty quick. I think it was just something like four or five, six months, which, as fast as it really comes in from submission to coverage. Obviously, the first time we went through the process, it took a little bit longer. Second time, much, much faster. I think we have a better sense for what is required from a Medicare point of view. Obviously, it's always up to their discretion in terms of what passes the bar or not. Clearly, having gone through the process multiple times now, we have a better sense of what is required. We have pretty high confidence around breast. We have good confidence around IO in terms of when we finally submit that to MolDX.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

We're making good progress on other cohorts as well with Reveal. It's an exciting pipeline for us.

[AmirAli Talasaz, Co-CEO at Guardant Health]

Regarding NCCN guideline, definitely it was a surprise great milestone for us. How much of it is impacting our volume within this very strong ramp that we are experiencing? It's very hard for us to kind of sort out the impact of each one of these kind of catalysts for us. NCCN, again, it's the voice of expert oncologists at the end. We are very excited with it, and we also continue to be very confident about inclusion by other guidelines, including ACS and USPSTF. I think some of this stuff is just common sense. You detect almost all Stage 2 and above CRCs, you can cure or have very long-term survival, even if you detect CRC at Stage 2. Do you want patients to be unscreened and do not detect their cancer?

[AmirAli Talasaz, Co-CEO at Guardant Health]

I think some of this stuff is just common sense, but over time, we are going to figure it out. We were very confident, and we remain very confident about guideline inclusion.

[Operator]

Our next question is from Dan Arias with Stifel. Your line is now open.

[Dan Arias, Analyst at Stifel]

Hey, guys. Thank you. AmirAli, you were sufficiently vague on that answer to V2 data timing. Is everything squared away on your end, and it's just a matter of when you decide to pull back the curtain on the results, or are there still things that are being worked on there? Sorry to ask again, but hot topic, to say the least.

[AmirAli Talasaz, Co-CEO at Guardant Health]

No problem. I understand. You're not doing a fine point on the exact timing of the V2 data, but as I mentioned, it's a very active program. A lot of work has gone into it. A lot of work is going into it as we speak, and we'll see. On the other side, we do not feel rushed to get to this, and some of it is really because of commercial success we are seeing by the currently active product, the V1. It gives us opportunity to balance some of our R&D initiatives. We pulled forward this MSAT clinical validation, bringing the lab and operation up for patient reporting, which can open up opportunities for us in near future down the road, and we'll see when we can wrap up this V2. We are working on it.

[Operator]

Our next question is from Patrick Donnelly with Citi. Your line is now open.

[Patrick Donnelly, Analyst at Citi]

Hey, guys. Thanks for taking the questions. Maybe one just on the profitability side. Nice to see the gross margins continue to creep higher with the profitability side. As you guys have advertised the last couple of quarters, you're going to continue to invest that on the sales and marketing side. Mike, could you speak to just your confidence in the path to real profitability here in the out years, the fact that you are willing to continue to reinvest rather than chase near-term profitability? Can you just talk about the confidence in the balance sheet, and again, that path to profitability as you reinvest some of these profit dollars? Thanks.

[Mike Bell, CFO at Guardant Health]

Patrick, I think at a high level, at our last Investor Day two years ago, we set this path to profitability of 2028. We said from then, 2023, we would be reducing our cash burn every year.

[Mike Bell, CFO at Guardant Health]

We're well on track with that. Things are going very well. We remain very confident that we can get to breakeven in 2028. On the Screening side, we've repeatedly said over the next couple of years, we'll manage to burn to something like $200 million. We'll be very thoughtful about reinvesting any additional gross profit back into the sales and margin line. I think we're ahead of track there. Our gross profit very strongly in Q2 is 48% gross margins. We're reinvesting that, but that's not increasing our overall burn above the target that we set at the start of the year. I think we're managing that very well. This $200 million burn is giving us everything that we need to really scale that commercial infrastructure as quickly as we can.

[Mike Bell, CFO at Guardant Health]

If you exclude Screening, actually, we're making fantastic progress. We said earlier on in the year that excluding Screening, the rest of the business is on track to be breakeven before the end of the year. That's still the case. I think, with the traction that we continue to see on ASPs better than expected gross margins, we feel really confident on that. I think from a balance sheet perspective, path to profitability, we're still confident and on track to what we stated in the past.

[Operator]

Our next question is from Rachel Vatnsdal with JPMorgan. Your line's now open.

[Rachel Vatnsdal, Analyst at JPMorgan]

Perfect. Good afternoon. Thanks so much for taking the questions. I wanted to press on Shield V2 a little bit more, but more so around the timelines associated with it. You previously had talked about hoping to get that launched by year-end, not really committing to timelines in terms of when we'll see that data. Just given we don't have it yet, can you walk us through your updated assumptions on how long do you think it will take for FDA to review once they do have the data, and are you still on track to launch that by year-end at this point?

[AmirAli Talasaz, Co-CEO at Guardant Health]

I'm not sure how much I can add, but in terms of the timelines for FDA approval and launch, obviously, it's a function of when we get to the readouts and how long it would take FDA to review our package. We are pleased with bunch of conversations we had with agency in terms of what they're going to look at and how they're going to look at. Now, how long it's going to take to go through that review process, we have to see how long their process would take. But maybe in terms of end of the year, maybe that's fair. Maybe we are delayed a little bit, but as I mentioned, I don't feel rushed to get to that milestone.

[AmirAli Talasaz, Co-CEO at Guardant Health]

It was important for us to balance some of our R&D activities between V2 and MCD. I'm very pleased with where we are today. We are working on it very extensively. A lot of work is happening. Maybe it's a little bit delayed.

[Operator]

Our next question is from Eve Burstein with Bernstein Research. Your line's now open.

[Eve Burstein, Analyst at Bernstein Research]

Great. Thanks so much for taking the questions. A couple on Shield. Now that Shield had ADLT status for four months, you're through a chunk of the time that you have to get private payers to contract with you. First, can you give us some color on how those conversations are progressing? I imagine that many private payers don't want to reimburse a test that won't get them quality credit yet. How are you handling that? Second, do you expect a contract with private payers at or close to the ADLT rate, or is the $920 rate more reasonable, or do you expect it to be below that? Third, you've given us a guide to ASP of $800 for the rest of the year, but how should we think about what happens to ASP next year?

[Eve Burstein, Analyst at Bernstein Research]

Could it actually decrease pretty meaningfully as that rate resets and as the payer mix shifts up a bit?

[AmirAli Talasaz, Co-CEO at Guardant Health]

In terms of conversation with private payers, we've been in touch with them, and even after NCCN guideline, we've been in touch with a fraction of the commercial payers that we think maybe they would be early adopter. We'll see what happens. We are not counting on any major coverage before getting into ACS and USPSTF guidelines. We'll see how it goes. In terms of expectation for ADLT rate, based on the collections that we are having from Medicare Advantage, we are very confident of keeping our ADLT as what it is today as we go to the next reporting cycle, which is going to start from January of 2026 till December of 2027. That $1,495, we are very confident it would remain the same. In terms of ASP, I think it's going to be a function of the payer mix.

[AmirAli Talasaz, Co-CEO at Guardant Health]

I think still we are in the early innings of this commercial execution. We are pleased with how the payer mix is landing at this time, but we are going to monitor it, and then we would set expectation for ASP as we get closer to 2026.

[Operator]

Our next question is from Bill Bonello with Craig-Hallum. Your line's now open.

[Bill Bonello, Analyst at Craig-Hallum]

Hey, guys. Thanks a lot for taking the question. I guess this one is for Helmy, maybe more big picture, thinking about the traction that you've gotten with Guardant360 Liquid and the paradigm shift from years ago, sort of tissue first to the big ramp you've had and the evolution towards people being willing to consider liquid first or looking at doing both. I'm just curious how you might extrapolate that experience to Reveal and sort of this notion that seems to be out there that, gosh, there's some superiority to tumor-informed and tumor-naïve is fine if you can't get a tissue, but otherwise you want to do tumor-informed. Could you see sort of a similar evolution? Are you hearing anything from physicians, KOLs in particular now that that leads you to believe that will happen?

[Helmy Eltoukhy, Co-CEO at Guardant Health]

That's a great question. I think that maybe one of the sort of underappreciated aspects of our Infinity platform, the sort of Smart Liquid Biopsy ecosystem, is that many of these apps that we're populating on Guardant360 Liquid will eventually make their way to Guardant360 Tissue and even Reveal where appropriate. When you think of where Reveal could be, it's going to look like a very different sort of product than any tumor-informed product out there that is just looking for passenger mutations or the number of mutations that may not be actionable. We're actually seeing the biology that is there in that individual, things like the subtype, how that's evolving, the potential even toxicity from some of the adjuvant therapy that they're being exposed to.

[Helmy Eltoukhy, Co-CEO at Guardant Health]

It really opens up a different space, which is why we've said that the MRD market will likely have two aspects to it. There'll be a tumor-informed sort of market that some physicians would like to use. There's going to be, I think, a pretty massive tissue-free aspect to it in the market, too. Just like there is in comprehensive genomic profiling, there's two big markets there. I would argue that the liquid market in CGP, I think few would argue is ultimately going to be massively bigger than the tissue market. We potentially see the same dynamic shaping up on the MRD side.

[Operator]

Our next question is from Yuko Oku with Morgan Stanley. Your line is now open.

[Yuko Oku, Analyst at Morgan Stanley]

Hello, thank you for taking my question. The recent SERENA-6 readout provides a compelling argument to monitor emergence of ESR1 mutation for treatment with camizestrant. What do you think may be the split at steady state to monitor emergence of ESR1 mutation between comprehensive panel like Guardant360 versus hotspot tests? Also with cuts to Medicaid, what is your view on the impact to cancer testing more broadly?

[Helmy Eltoukhy, Co-CEO at Guardant Health]

We really see this as a beachhead for a new paradigm in precision oncology that will ultimately be the paradigm that I think all patients are monitored and treated with. The point is, ESR1 is the first of what we think will be many opportunities to switch therapies dynamically, really this idea of adaptive management of disease. The camizestrant example, we are the enrolling assay. We will be, if it gets approved, the official CDx for that, at least in the United States. I think we have a very good chance of not only opening the door in this new paradigm, but capitalizing on the majority of the opportunity and volume that would be there in the first couple of years. We see it as, I think, a very significant upside opportunity on Guardant360 volumes in the future.

[Zarak Khurshid, VP of Investor Relations at Guardant Health]

One more question, please, operator.

[Operator]

Our last question is from Luke Sergott with Barclays. Your line is now open.

[Salem Salem, Analyst at Barclays]

This is Salem Salem, on for Luke. Thanks for squeezing us in here. Just kind of piggybacking off of question before, I guess on Medicaid, could you give us an update on what your exposure is to those volumes, if possible by test, which I realize is a tall order, and if not, kind of ballpark numbers, just given the expected fallout of the big beautiful bill? What do you kind of expect on pacing of any potential headwinds this year or next year? Thank you.

[Mike Bell, CFO at Guardant Health]

I can take that one. Very simply, Medicaid volume is very minimal in our overall volume across all products, and even less so on the revenue side. Any impact overall to Medicaid isn't really going to have any impact on our overall volume or revenue.

[Operator]

That concludes the conference call. Thank you for your participation. Enjoy the rest of your day.

Participants

Executives

• AmirAli Talasaz, Co-CEO
• Helmy Eltoukhy, Co-CEO
• Mike Bell, CFO
• Zarak Khurshid, VP of Investor Relations

Analysts

• Bill Bonello, Analyst at Craig-Hallum
• Dan Arias, Analyst at Stifel
• Dan Brennan, Analyst at TD Cowen
• Eve Burstein, Analyst at Bernstein Research
• Kyle Mikson, Analyst at Canaccord
• Mark Massaro, Analyst at BTIG
• Patrick Donnelly, Analyst at Citi
• Puneet Souda, Analyst at Leerink
• Rachel Vatnsdal, Analyst at JPMorgan
• Salem Salem, Analyst at Barclays
• Subbu Nambi, Analyst at Guggenheim
• Tycho Peterson, Analyst at Jefferies
• Yuko Oku, Analyst at Morgan Stanley