Guardant Health Boosts 2025 Revenue Forecast to $880-890M on Robust Oncology and Screening Growth

By Joglo Lawasan July 07, 2025 Post a Comment

Insights from the Earnings Call: Guardant Health (GH) First Quarter 2025

Management View

Helmy Eltoukhy, who serves as Co-CEO, pointed out significant progress across Guardant Health's range of offerings, thanks to major enhancements to their products and the introduction of Shield. He stressed the company's commitment to aiding patients through every phase of battling cancer, starting with early discovery all the way up to choosing appropriate treatments.
In Q1, revenues climbed 21% compared to the previous year, totaling $203 million. Revenue from oncology surged 20% annually to reach $151 million, driven by an uptick of 25%, bringing test volumes up to around 59,000. Both Guardant360 and Reveal played key roles in this expansion.
Guardant360 saw an increase in average selling price to $3,000-$3,100, bolstered by better Medicare and commercial reimbursements. Meanwhile, Reveal turned profitable with respect to gross margins thanks to a 50% decrease in cost of goods sold.
AmirAli Talasaz, Co-CEO, highlighted positive progress for Shield, reporting $5.7 million in revenue along with around 9,000 tests completed in the first quarter. The addition of ADLT status improved Medicare pricing to $1,495, thereby enhancing patient access.
Michael Bell, the Chief Financial Officer, announced that for Q1, the non-GAAP gross margin stood at 65%. This represents an increase from last year’s first quarter, which saw a gross margin of 63%. The growth can be attributed to increased average selling prices (ASPs) for oncology products along with decreased costs associated with the Reveal and Shield lines.

Outlook

The company raised its 2025 revenue guidance to $880-$890 million, representing 19%-20% growth compared to 2024.
Oncology revenue is now expected to grow approximately 18% year-over-year, with total oncology volume projected to grow over 25%.
The revenue forecast for Shield has been raised to $40-$45 million, anticipating test volumes between 52,000 and 58,000, bolstered by an elevated average selling price due to ADLT classification along with greater anticipated demand.
Guardant Health anticipates full-year non-GAAP gross margins between 62% and 63%, which reflects advancements in average selling prices along with increased cost efficiency.

Financial Results

Q1 total revenue amounted to $203.5 million, of which $150.6 million was contributed by oncology. The increases in oncology average sales price (ASP) and higher volumes were key drivers for these gains.
Reveal and Shield achieved positive gross margins, with Reveal profiting from expenses dropping under $500 per test and Shield attaining an average selling price of $600.
The revenue from Biopharma & Data increased by 21% year-over-year to reach $45.4 million. This expansion was fueled partly by strategic partnerships, such as a fresh deal with Pfizer.
In the first quarter, free cash flow burn rose to $67 million because of the schedule for bonus payments; however, this was better than the previous year when adjusted. By the end of the first quarter, Guardant had $804 million in cash and equivalent assets.

Q&A

Mark Massaro from BTIG asked what was driving the increase in oncology volumes. Helmy Eltoukhy clarified that factors such as advancements in technology, including the new smart liquid biopsy platform, along with enhanced order complexity, were key contributors to this growth.
Tycho Peterson of Jefferies asked about Shield guidance and ASP assumptions. AmirAli Talasaz explained that the rise in ASP was mainly due to ADLT pricing and greater volume, with Medicare contributing significantly.
Subbu Nambi of Guggenheim was queried regarding the possible upsides and downsides to the Shield volume forecast. He pointed out the opportunities arising from enhanced sales efficiency and inclusion in guidelines, with these benefits being somewhat offset by targeted efforts aimed at risk reduction.
Bill Bonello from Craig-Hallum asked about the uptake of tissue tests and how they position competitively. Eltoukhy highlighted the advantages of decreased tissue needs and expanded genomic capacities.

Sentiment Analysis

Experts showed guarded enthusiasm, concentrating on expansion in volumes and enhancements in reimbursements as primary catalysts.
The management kept an assured posture, emphasizing notable accomplishments in operations and key strategic benchmarks.
In comparison to the prior quarter, the management team expressed greater confidence regarding the expansion of Shield and an increase in oncology case volume.

Quarter-over-Quarter Comparison

The revenue forecast has been raised from $850-$860 million to $880-$890 million, thanks to better-than-predicted outcomes for Shield and oncology products.
The target number of shield volumes increased from 45,000-50,000 tests to 52,000-58,000, backed by positive ADLT outcomes and an elevated ASP.
The non-GAAP gross margin increased to 65% in the first quarter from 63% in the prior year, indicating enhanced operational efficiency.
The analysts' attention has increasingly turned to Shield's uptake and revenue from subscription services, highlighting its rising importance.

Risks and Concerns

The management team recognized possible risks associated with expanding Shield's business activities and boosting the efficiency of newly recruited sales personnel.
Experts expressed worries regarding reimbursement from non-Medicare payers and the speed at which new items such as Shield and Guardant360 Tissue would be embraced.
The management emphasized their continuous endeavors to tackle these risks via specific financial commitments and the incorporation of new guidelines.

Final Takeaway

In the first quarter of 2025, Guardant Health demonstrated robust financial health with significant increases in revenue and oncology volumes. Notable achievements were Shield attaining ADLT status along with both Reveal and Shield reaching positive gross margins. The firm has also upgraded its annual revenue forecast, signaling their trust in current product lines and effective operations. Their strategic emphasis remains on broadening the reach of Shield and enhancing average selling prices as they aim towards sustainable future expansion.

Review the complete earnings call transcript here.

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