Natera Q1 2026 Earnings Call - Record MRD Volumes and Japan Launch Drive Revenue Reset

Operator: Ladies and gentlemen, welcome to Natera’s first quarter 2026 financial results conference call. At this time, all participants are in a listen-only mode. Following management’s prepared remarks, we will hold a question-and-answer session. To ask a question at that time, please press star followed by 1 on your telephone keypad. If anyone has difficulty hearing the conference, please press star 0 for operator assistance. As a reminder, this conference call is being recorded today, May, excuse me, May 7th, 2026. I would now like to turn the conference over to Michael Brophy, Chief Financial Officer. Please go ahead.

Michael Brophy, Chief Financial Officer, Natera: Thanks, operator. Good afternoon. Thank you for joining our conference call to discuss the results of our first quarter of 2026. On the line, I am joined by Steve Chapman, our CEO, Solomon Moshkevich, President, Clinical Diagnostics, and Alexey Aleshin, General Manager of Oncology and our Chief Medical Officer. Today’s conference call is being broadcast live via webcast. We will be referring to a slide presentation that has been posted to investor.natera.com. A replay of the call will also be posted to our IR website as soon as it’s available.

Starting on slide two, during the course of this conference call, we will make forward-looking statements regarding future events and our anticipated future performance, such as our operational and financial outlook and projections, our assumptions for that outlook, market size, partnerships, clinical studies and expected results, opportunities and strategies, and expectations for current and future products, including product capabilities, expected release dates, reimbursement coverage, and related effects on our financial and operating results. We caution you that such statements reflect our best judgment based on factors currently known to us and that actual events or results could differ materially. Please refer to the documents we file from time to time with the SEC, including our most recent Form 10-K or Form 10-Q and the Form 8-K filed with today’s press release.

Those documents identify important risks and other factors that may cause our actual results to differ materially from those contained in or suggested by the forward-looking statements. Forward-looking statements made during the call are being made as of today, May seventh, 2026. If this call is replayed or reviewed after today, the information presented during the call may not contain current or accurate information. Natera disclaims any obligation to update or revise any forward-looking statements. We will provide guidance on today’s call, but will not provide any further guidance or updates on our performance during the quarter unless we do so in a public forum. We will quote a number of numeric or growth changes as we discuss our financial performance, unless otherwise noted, each such reference represents a year-on-year comparison. Now I’d like to turn the call over to Steve. Steve?

Calum Kishmarsh, Analyst, Morgan Stanley1: Thanks, Mike. Let’s get to the highlights. We had another excellent quarter as you can see here. We posted revenues of $697 million in Q1, 39% growth over last year. Even at our scale, Q1 shows we are still in rapid growth mode. It was just a short while ago that we celebrated a milestone by delivering 1 million units in a year. Q1 was our first to deliver 1 million units in a single quarter, headlined by excellent volume performance in women’s health and another record growth quarter for oncology. We feel like we’re just getting started. On women’s health, the core business grew exceptionally well, and we had a very successful launch of our Fetal Focus product. The Fetal Focus launch is exceeding expectations based on the strength of our technology and data from the prospective blinded multi-site EXPAND trial.

We are winning new customers and experiencing high client retention rates. We’re approaching a run rate of nearly 200,000 Fetal Focus orders, which is impressive given our recent launch date. In oncology, we processed 249,000 clinical oncology units in the quarter, which is 55% growth over last year and yet another record with roughly 24,000 units over the Q4 results. This is the biggest increase we’ve ever achieved. In February, we guided to full-year gross margins of 64% at the midpoint, and we’re pleased to have exceeded that level in Q1 with gross margins coming in at just under 65%.

The rapid increase in volumes in Q1 actually harmed margins by roughly 2 percentage points because we had more samples in process in the lab at the close of the quarter than normal, impacting our received versus reported ratio. This will resolve itself as we move forward, we believe we are in a very good position relative to the guide. Given the fantastic start to the year, we are pleased to fully reset the revenue guide range by more than $120 million and increase our gross margin guidance to 65% at the midpoint. Enrollment in oncology clinical trials, including new interventional MRD trials and the FIND-ECD study, are well ahead of schedule. We’re going to bump R&D expectations by $50 million primarily to pull forward these trials.

Of note, on the FIND-ECD study, we are pleased to announce that we should be fully done enrolling in Q3 of this year, which is super exciting given the huge opportunity that provides as we look to a 2027 launch. Alexey will cover this later on the call. Let’s unpack some of the trends on the next few slides. On volume, I want to thank our team for getting us over 1 million units in a quarter. Natera employees are very passionate about our mission to improve health, and it shows in our performance. Thank you for what you do every day. We fired on all cylinders in Q1 with another strong organ health quarter to go alongside record units oncology and a very strong women’s health quarter.

While we do expect Q1 to be strong due to seasonality, this was really an incredible quarter and nearly the most unit growth we’ve seen since I took over as CEO. We’ve seen a lot of new account momentum with the launch of Fetal Focus, as we’ll describe on the next slide. As a reminder, Fetal Focus is our next generation single gene NIPT. It’s powered by our ultra-sensitive LinkedSNP technology and enables direct assessment of fetal cell-free DNA across 21 genes associated with serious early onset conditions. We continue to see strong interest from clinicians, particularly given the test’s ability to address a common gap in prenatal care, specifically when paternal screening is not available. That demand is now transitioning into meaningful scale.

As shown on the slide, we are approaching an annualized run rate of approximately 200,000 test orders, reflecting strong adoption across OBGYNs and MFMs. For clarity, we don’t count these Fetal Focus orders in our test process numbers when Horizon is negative for one of the 21 conditions tested. When we say we saw an incredible growth quarter, we’re really referring to the core Horizon of Panorama testing and not including the majority of these Fetal Focus orders, which would boost our numbers even higher. Importantly, this growth is supported by strong clinical foundation. The EXPAND trial has been a major success and was selected for an oral plenary presentation at the Society for Maternal-Fetal Medicine meeting, a rare distinction that underscores both the quality of the data and its clinical relevance.

As a reminder, the EXPAND trial is a prospective, blinded, multicenter study that has definitive genetic outcomes on all participants, both positives and negatives. The goal is to enroll about 2,000 patients into the study. This has been ongoing now for several years. The EXPAND results were recently submitted for peer-reviewed publication. We believe we will continue to see Fetal Focus emerge as a meaningful contributor to growth in the women’s health business. The next slide shows our clinical MRD volume progression over time. First, let’s look at the total number of MRD tests. Hitting nearly 250,000 tests is an incredible number. We are now on a run rate of over 1 million MRD tests annually. We were able to grow by approximately 24,000 units in Q1, which was another record for our team.

It’s amazing to think we are still in the early stages of what MRD can become. In the volume, we are continuing to see strong growth in the core indications of colorectal and breast cancer, while seeing increasing contributions from other cancer types. I’d like to cover some of those growth drivers here on the next slide. The Q1 growth was the result of some major milestones in the second half of 2025, where we had a steady cadence of important data readouts and publications across uterine, testicular, breast, colorectal, and lymphoma. A major highlight was our bladder cancer data being presented at ESMO and then being published in the New England Journal of Medicine.

We are still seeing the impact of this data in our volumes in bladder cancer and beyond, as it always takes time to see new clinical data translate into real behavioral changes in the doctor’s office. In addition to the new data, we launched an integration with OncoEMR across their network of 4,500 physicians, creating a much more seamless ordering experience. You’ll recall that we also expanded our commercial footprint last year, and I think we’re seeing those reps start to contribute in a real way. We also differentiate our platform with the acquisition of Foresight Diagnostics. The Foresight integration is going well, and their deep research and clinical relationships have also been a tailwind for Signatera adoption in the clinical setting.

Many hematologists are starting to order Signatera MRD for their lymphoma patients, and the biopharma interest has really been picking up in both heme and solid tumors based on the value of the phased variant technology. We are pleased to see this working well thus far. We’ve also listed some of the wins from the first few months of the year on this slide, and we believe that will drive future MRD growth across tumor types. Solomon will discuss a few of these later in the call, including a recent data set showing how Signatera may enable surgery avoidance, as well as the exciting new data from the ALPHA3 trial. More detail on our revenue progression is here on the next slide. In addition to the strong volume growth, revenue growth is being amplified by realized average selling prices continuing to climb.

We spent a lot of time detailing all this hard work and investment we put into obtaining reimbursement for covered services, and those efforts continue to bear fruit. Unit ASPs were up across the board in women’s health and organ health, and Signatera ASPs reached another high now at roughly $1,250. Mike will spend more time on this in his section. The second driver to realized pricing growth is worth watching as well. Even as women’s health continues to grow, the rapid expansion of organ health and oncology units mean they contribute an increasingly large share of total revenues. This trend is a further amplifier of revenue and gross margin growth in the future.

As a reminder, in Signatera, we have many histologies in submission to Medicare and are currently engaged in the standard cycle of coverage review, which represents additional ASP runway in the second half of this year. As we talked about in the past, we previously set out a long-term Signatera ASP target of $2,000 per test. We think we’re still on track to hit that goal as more private payers start to pay and a broader set of indications gets covered. Just at our current annualized volumes, a $2,000 ASP would generate an additional $750 million in revenue and gross profit per year. The next slide is our standard gross margin progression quarter by quarter going back 2 years. In addition to the ASP growth this quarter, COGS per unit in the lab were clean, largely holding steady with a very strong Q4 performance.

Layered on top of these unit COGS were a couple of factors that we think are transient that impacted margin in the quarter, and without these, we would have been about 2% higher. First, we took a larger than usual stock-based comp charge to COGS as part of the close of the Foresight acquisition in Q4. Second, a larger impact was just the amount of work in progress we held in the lab at the end of March. We only build out and recognize revenue on about 92% of our cases received in the quarter, while that ratio is normally 95%-96%. Since we take COGS charges as we use materials and labor to process cases in the lab, we’ve got a larger than usual bolus of cases hitting COGS, but not revenue in a quarter.

This happened because the volume coming into the lab was so high, particularly at the end of the quarter, which is, of course, a good sign for us. I expect this factor to normalize in the subsequent quarters. Mike will spend more time on these dynamics in his section, but we are sufficiently encouraged on gross margins to meaningfully raise the full year guide. Okay. With that, let me turn it over to Solomon to discuss more details from the quarter. Solomon?

Calum Kishmarsh, Analyst, Morgan Stanley0: Thanks, Steve. In my section, I want to highlight several new sources of clinical and economic utility that we are observing with Signatera. There’s a big new story emerging about the ability to use Signatera in certain patients to determine who might avoid surgery. On this slide, we have three examples where data was presented or published in the first quarter of the year showing that certain patients, if they test Signatera MRD negative, can forego surgery. In bladder cancer, data presented at ASCO GU conference showed that Signatera MRD negative patients who avoided cystectomy had similar outcomes as those who had the surgery. The investigators concluded that ctDNA negative patients may avoid immediate cystectomy. This is a huge deal, as bladder-sparing approaches are in extremely high demand due to the heavy impact on quality of life.

In rectal cancer, a paper was published in the journal Cancers showing that after neoadjuvant therapy, Signatera MRD negative patients who chose to avoid surgery had excellent outcomes. Again, sparing the rectum could have a huge impact on quality of life. It looks like Signatera can really change the risk-benefit equation and potentially drive massive clinical and economic benefit. Finally, in breast cancer, a paper was published in Clinical Cancer Research showing that women over 70 with early-stage ER-positive disease who tested Signatera MRD negative at diagnosis were able to forego surgery and remain progression-free. The authors wrote that this can facilitate surgical de-escalation. The broader implication here is important. MRD testing is not only about finding recurrence earlier. It can also help avoid overtreatment, including major surgeries as well as systemic therapy. Physicians are very enthusiastic about this new data and the opportunity to de-escalate surgery.

As a reminder, Signatera is already covered by Medicare in all of these indications. We look forward to proving this out in other cancer types and continuing to build out the value proposition. Moving on now, I want to highlight the recently announced interim analysis from the ALPHA3 trial. Sponsored by Allogene Therapeutics, ALPHA3 is the first randomized study in large B-cell lymphoma to identify patients with positive MRD following frontline therapy and to intervene with an experimental second-line treatment while the disease burden remains low. As shown on the slide, the data demonstrated a clear separation between the trial arms. MRD clearance was 58% in the treatment arm versus 17% in the observation arm, representing a 41 point absolute delta.

We also observed the quantitative molecular responses, with median ctDNA levels decreasing 98% from baseline in the treatment arm, while increasing 27% in the observation arm. I will note that this interim futility analysis leveraged MRD clearance as an endpoint in addition to MRD status for patient enrollment. As a reminder, this trial was already underway when we acquired Foresight Diagnostics in December. On the basis of this positive readout, we congratulate our colleagues from Foresight and from Allogene Therapeutics, and we look forward to completing the trial and hopefully enabling a valuable new therapy in the arsenal for patients with B-cell lymphoma. With this data, plus the 15 abstracts presented at the ASH conference, we are seeing a growing wave of interest from biopharma in hematology and beyond. An exciting time.

While this trial drives treatment on MRD or tumor based on a 1 time point after the completion of first-line therapy, we are seeing the MRD concept really take off across the board. IMvigor011 was an MRD trial as well, in that case, with up to 7 time points in the 1st year of post-surgery. It’s worth spending a 1 minute on the magnitude of the MRD opportunity. Treatment on MRD creates a new paradigm, enabling both earlier, more aggressive interventions for patients destined to recur, as well as deferred interventions for patients with low likelihood of recurrence. In the surveillance setting today, patients are usually monitored but not treated until recurrence is visible on a scan. MRD changes that by using MRD to trigger earlier treatment and intervention when disease is first detected in the blood, which is usually before it becomes detectable on a scan.

We are seeing this idea play out in multiple pharma-sponsored trials, including ALPHA3 in lymphoma, STELLAR-316 in colorectal cancer, TREAT ctDNA and DARE in breast cancer, and IMvigor011 in bladder cancer. We look forward to launching more of these in the adjuvant setting, instead of treating all comers with systemic chemo or immunotherapy, TOMOR allows MRD negative patients to avoid potentially unnecessary therapy and continuous surveillance. If they later become MRD positive, treatment can be escalated later at that time. To that point, perhaps the most important finding from our perspective from the IMvigor011 trial was that patients who delayed the initiation of immunotherapy until they turned MRD positive enjoyed the same high level of therapeutic benefit as those who started immunotherapy right after surgery. That unlocks a major sea change in how patients are treated.

In the IMvigor011 trial, 47% of patients were persistently MRD negative over the course of the first year and avoided adjuvant systemic therapy completely, achieving excellent long-term outcomes, including 2-year overall survival of 97%. We estimate that a course of adjuvant immunotherapy can cost around $196,000 per year, not to mention the cost of managing adverse events. Avoiding this cost in approximately half of bladder cancer patients can be extremely valuable to the patient and to the system. We think the value proposition in bladder cancer holds up even with the advent of new perioperative treatment approaches, like with EV-pembro, where many doctors are telling us that they will consider withholding the EV in patients who test MRD negative after surgery.

The EV component itself is estimated to cost over $100,000 per patient and to be more toxic than the pembrolizumab. We see a similar story playing out across disease types, with TOMOR translating into meaningful clinical and economic utility. In colorectal cancer, for example, at least two different health economic studies have been presented in the past, one by a Blue Shield plan and one by a large private payer in the U.K. called Bupa, showing that MRD-guided treatment in stage 2 and 3 colorectal can result in meaningful cost savings to the system, ranging between 21%-43%. With that, I’ll turn it over to Alex to provide an outlook on upcoming data readouts and our launch in Japan. Alex?

Alexey Aleshin, General Manager of Oncology and Chief Medical Officer, Natera: Thanks, Solomon. Turning to ASCO this year, we have a powerful opportunity to reinforce Signatera’s leadership in MRD. The headline is clear: breadth, scale, and momentum. We will have 35 abstracts spanning TOMOR, pan-cancer MRD, phased variant technology, real-world evidence, and trials in progress. That level of output matters because it shows Signatera is not a single tumor, single use case, or single study story. We are building the evidence base for MRD across the full oncology landscape and doing it at a scale that we believe is unmatched. The presentation I would highlight is the pan-cancer MRD meta-analysis. This is an important step forward because it moves the discussion beyond individual tumor type wins to a broader platform-level statement.

Across 18 published studies, more than 3,000 patients in 15 solid tumor types, ctDNA positivity was strongly associated with recurrence risk in both the MRD window and surveillance settings. These data reinforce the clinical relevance of tumor-informed ctDNA across cancers and support the idea that MRD is becoming a foundational tool in oncology. That message is also reflected across the broader ASCO program. We will be presenting data in colorectal cancer, bladder, breast, lung, lymphoma, melanoma, ovarian, uterine, sarcoma, and other tumor types, showing the expanding role of Signatera across settings from adjuvant decision-making to surveillance, treatment response monitoring, and treatment on molecular recurrence. The TOMOR data are particularly exciting because they point to where oncology is heading, moving from reactive treatment after radiological relapse to earlier, more precision interventions at the molecular recurrence stage.

Our phased variant technology presentations in lung cancer and lymphoma further highlight how our technology platform continues to advance, pushing sensitivity in settings where detection is especially challenging. Together, these data reinforce 3 core messages. Signatera is broadly clinically actionable today, our technology platform continues to advance, and our evidence generation engine is operating at unmatched scale. Looking at the next slide, it is remarkable to see how we’ve continued to launch important trials that we believe will deliver compelling data to advance MRD testing in breast cancer. What you’re seeing here is the scale and depth of the clinical work we’ve built, spanning every stage of disease from early to metastatic. We’ve continued to expand our evidence base with 22 peer-reviewed publications and 84 presentations at leading medical meetings, reflecting both the momentum and growing interest from the clinical community.

At the same time, we continue to advance our prospective trial pipeline with high-impact studies across multiple settings, including interventional randomized studies like SAFE, DARE, and HEROES, each answering an important question, including de-escalation, TOMOR, and treatment optimization in exceptional responders, respectively. Underpinning all of this is a substantial investment, now exceeding over $250 million in breast cancer trials alone, reflecting both the opportunity we see and the barrier to entry it creates for others trying to build a comparable data set. When you zoom out, the breast cancer program is really strong, and we look forward to announcing additional game-changing trials in the near future. We’re expanding the evidence base, deepening clinical utility, and investing ahead of what we believe will be significant long-term adoption.

I want to talk about 2 major areas of upside for Natera: early cancer detection and the Japan Signatera launch. Turning to early cancer detection. FIND-CRC is 1 of the most exciting milestones ahead for Natera. This is our FDA-enabling colorectal cancer screening study targeting approximately 25 to 40,000 average-risk adults, including about 70 CRC cases and roughly 1,400 advanced adenomas. Enrollment is progressing above plan, we’re now on pace to complete enrollment for the PMA submission in Q3 2026, supporting the path forward for an FDA PMA readout in 2027. What makes this especially compelling is that we are not starting from a blank slate. In PROCEED-CRC, a prospectively enrolled study of average-risk asymptomatic participants, we previously demonstrated a 22.5% sensitivity for advanced adenomas at a 91.5% specificity. That is important because these were not easy-to-detect lesions.

Nearly all were under 30 millimeters, and more than 90% were under 20 millimeters. In other words, we’re seeing encouraging performance in exactly the kind of challenging precancerous lesions where blood-based screening has historically struggled. That matters because the biggest opportunity in colorectal cancer screening is not just finding cancer earlier. It is helping prevent cancer by detecting advanced adenomas before they progress. This is where we believe Natera can be differentiated. Strategically, CRC screening is only the first step. As we advance FIND-CRC, we’re also building the foundation for a broader early detection platform, including development of a multi-cancer early detection assay. Again, we’re ahead of plan here with trial enrollment. Finally, a note about the outlook for our launch in Japan. Japan is one of the most exciting near-term growth opportunities for Signatera and importantly, it has the potential to become a meaningful volume accelerator.

PMDA approval remains on track for Q2 2026, and commercial launch preparations are advancing for a broad commercial launch shortly after. The CRC opportunity alone is significant. Japan has a similar absolute number of colorectal cancer diagnoses as the U.S., and we estimate that a launch could effectively double Signatera’s annual CRC volume TAM. Over time, expansion into additional histologies could make Japan a broader platform market, with MIBC submission being the next prioritized use case given the IMvigor011 data. What gives us confidence is that the market is already being seeded through CIRCULATE-Japan and GALAXY. Signatera has been used across more than 150 institutions, giving hundreds of oncologists firsthand experience before commercialization. In addition, both JASMO and JSCO have issued supportive clinical practice guidelines for MRD testing, creating favorable clinical backdrop for adoption.

That familiarity could help volumes ramp faster than our base case assumptions. Japan’s structure also supports rapid adoption. With a single national payer, one positive reimbursement decision can open broad access across the country. The message is clear: Japan can be a step change opportunity, expanding our global MRD market, accelerating commercial volumes, and reinforcing Natera’s leadership worldwide. With that, let me turn it over to Mike to review the financials. Mike?

Michael Brophy, Chief Financial Officer, Natera: Great. Thanks, Alex. The next page is just a summary of the financials compared to last year. On revenues, we had another good quarter of sequential ASP progress across the board. We had about $60 million in revenue true-ups this quarter, in line with Q4 and of course, smaller as a % of revenue compared to Q4. Given the longer history we now have with improved realized pricing, we took a modestly more aggressive approach with accruing higher prices for selected payers and products that have strong payment track records. This is just an incremental shift from our historical approach, we’ll continue to turn the dial on ASPs if the cash receipts continue to exceed our expectations. Signatera ASPs are now roughly at $1,250, as Steve described. That’s another roughly $25 increase over Q4.

We achieved that just by continuing to execute our playbook of driving better alignment with the smaller Medicare Advantage plans and grinding out more consistent reimbursement for covered services in the biomarkers space. In addition to those factors, we got a bump from the improved bundled pricing CMS announced at the beginning of the year, which has more than offset the modest decline in ADLT rates we spoke about on the November call. While the new bundled pricing is fully reflected in the revenue results, that change in the bundled pricing actually caused a temporary delay in cash collections for Signatera, as we had to take some time to update our list pricing for each covered tumor type, reload each bundled price back into the system with all of our payers and revalidate the engineering. That caused a modest step-up in DSOs this quarter.

We’ve now gotten the new prices largely loaded in and have seen the delayed cash arrive in April, so collections for Signatera are back on track. Good. Let’s get to the guide on the next slide. We’re really pleased with the start to the year and happy to be completely resetting the revenue guide up $120 million at the midpoint. While the guide is a lot higher, the underlying drivers look achievable to us at this point in the year. On volumes, we continue to expect quarterly growth in Signatera along the lines of the trailing 12-month average, as we have described in the past. We expect to see organ health continue to grow on its current trend line.

The revenue guide also bakes in the seasonality and volumes we typically see in women’s health, where Q1 is our strongest quarter, Q2 the slowest, and then we see recovery in the second half of the year. As Steve mentioned, we’ve got a pathway to continue grinding ASPs higher. For example, the original guide contemplated getting $50 in ASP gains on Signatera this year. The new revenue guide implies we anticipate exiting 2026 at roughly $1,275, and of course, we are pushing to be higher than that as there are significant opportunity among the private payers and from expanding Medicare coverage to new indications. I think we can get to the $1,275 ASP without additional coverage decisions, so these would be upside to our guide.

Steve covered gross margins in some detail in his section, but I would just reiterate that we are feeling good given the per unit COGS we saw in Q1 and should have some tailwind in the send-to-receive ratio in the next few quarters. Given those factors, current ASP trends, and the Q1 actuals baked into the annual number, we think resetting the midpoint at 65% still leaves room for upside as we progress through the year. As a reminder, when guiding to future periods, we do not include the impact of revenue true-ups, so those would represent further upside to the guide. On OpEx, we are holding SG&A steady as planned in March.

We are pleased with the progress so far with all the growth initiatives we have in place in sales and marketing and continue to get scale on our operations that are not needing to grow anywhere near as fast as revenue. We’ve deployed a significant amount of AI capability around the business in the last year, and I think we are well-positioned to drive more efficiency over the near term. On R&D, I’m pleased to see the FIND study progressing faster than expected, and we’ve been very glad to invest in more clinical trials for Signatera that have become available to us just this spring. We have a long track record of generating high ROIC in our R&D efforts. Our plan is to stay ambitious to maintain our leadership position across the portfolio. Okay. With that, let me open it up to questions. Operator?

Operator: Thank you. We’ll now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, press star 1 again. If you’re called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your questions. Again, it is star 1 to join the queue. Our first question comes from the line of Doug Schenkel with Wolfe Research. Your line is open.

Doug Schenkel, Analyst, Wolfe Research: Good afternoon, and thank you for taking my questions. I’ll keep them to two, and they’re both financial. First, on gross margin, you had a really nice quarter, even normalized for catch-ups. You bumped up full year guidance by about a point. That said, it does seem like you could have gone further than that. Are you holding back largely just because of things like MRP mix and, you know, basically just trying to get a better handle on how that is going to play out given, you know, it’s only May? That’s the first question. Second question is on spending, specific to the SG&A line. It jumped up a bit as a percentage of sales relative to what we saw in the fourth quarter.

I’m just wondering if there were any timing dynamics or things that you would consider one-timer-ish, that we should be contemplating as we evaluate, spending discipline in the quarter and update our models. Thank you.

Michael Brophy, Chief Financial Officer, Natera: Hey, Doug. Yeah, thanks for the question.

Calum Kishmarsh, Analyst, Morgan Stanley1: Mike, why don’t you take this?

Michael Brophy, Chief Financial Officer, Natera: Yeah. Thanks for the question, Doug Schenkel. Yeah, on gross margins, I think this is just kind of a philosophical point with respect to our guide. We do feel like, you know, I’m biased toward the upside as it relates to our gross margin trajectory through the course of the year, but we are always looking out for those potential risk factors to gross margin always. As we talked about in the prepared remarks, I mean, if you just dial down to the unit economics, you know, strip out the kind of the Foresight Diagnostics equity and things like that that we paid out as part of the deal. If you just look at kind of just COGS per unit and ASPs, those are looking really clean.

I think, you know, I laid out in my section just a couple of the drivers for ASPs going forward, particularly related to Signatera, which we’re excited about. We did not include kind of all of the potential drivers in the guide, so I agree there could be upside there. Yeah, thanks for the question on SG&A. I mean, Q1 is often elevated as it relates to kind of, you know, sales and marketing expenses. Had a number of those in the quarter that don’t repeat. Had a couple of true one-timers related to kind of balance sheet adjustments that related to non-cash charges in the quarter. I’m roughly estimating those were worth about $25 million just in the quarter.

When you back that out and kind of normalize that’s what gives me confidence around the SG&A guide for the rest of the year. Just a general comment on OpEx generally is that our posture is to marry up the spending discipline that we’ve talked about while still remaining opportunistic, still recognizing that we’ve got a huge growth runway ahead of us. If these high ROIC opportunities come in the door, we’re not gonna hesitate. We’re gonna keep our foot on the gas, and we’re gonna be aggressive to ensure we maintain a leadership position across all these businesses. Thanks for those questions.

Operator: Our next question comes from the line of Dan Brennan with TD Cowen. Your line is open.

Dan Brennan, Analyst, TD Cowen: Great. Thank you. Thanks for the questions. Maybe first one just on volumes. Steve, I think you called out this idea that 92% of tests got recognized in the quarter was atypical versus 95%-96%. I’m just wondering how unusual is that? I mean, if you just applied 95%-96% this quarter, that would be like another 10,000 tests, maybe a, you know, real Signatera blowout. Are those-- You know, is it factored into Q2? Should we see a big bump there? I guess that’s the first question. The second question is just related to MolDX. You know, I know you kinda called out again, you know, the opportunity there. Kinda what’s the latest thinking there on pan-cancer potential? I know, Steve, you’ve called out in the past a $200 million potential.

Is that something we could potentially see at some point, either this year or next year? Do you think it’s gonna be single cancer by single cancer? Just wondering your latest thinking there. Thanks.

Calum Kishmarsh, Analyst, Morgan Stanley1: Yeah, thanks. Why don’t I take the MolDX comment, then Mike, you can talk about the received to reported ratio, which should be, you know, probably more favorable in Q2. Yeah, MolDX, we’re feeling really good. We said previously, we have, I think, something like 7 additional histologies or additional submissions that are in. Those went in, you know, I think, right maybe in Q4. We had already kind of 1 round of back and forth with MolDX on those. These are all kind of following the standard process that we’ve seen. You know, we’re feeling positive about it. I think these 1s that are in submission right now would make up, you know, the vast majority of the sort of remaining non-covered business for us.

As we’ve said, that would have a value in a similar range to what you’ve outlined. It could be very meaningful for us, both from getting the Medicare payment, but also now with commercial payers starting to slowly comply with the biomarker state initiatives or state laws. We think there’s some upside there as well. Ultimately, we do think we’re on a trajectory to get to around $2,000 ASP. If you multiply that by our volume today, that would be worth something like $750 million in volume and margin. Obviously lots of upside there, and we think there’s paths to unlock. We’re working on those.

Mike, you wanna comment on the margin and received to report ratio?

Michael Brophy, Chief Financial Officer, Natera: Yeah. The send receive is usually about 95, 96%. It’s not at all unusual to have a very high ratio in Q4 and a low ratio in Q1. That’s actually kind of our typical experience. Sometimes that’s masked by just other factors in the business that are just rapidly changing, like we’ve had, maybe 2024. If you go back to prior years, it’s quite evident. The factor there is just similar to what Steve Chapman described in the prepared remarks. When the women’s health business is rocking like it did in Q1, that’s just a very high volume, enterprise at this point.

If you bring in a ton of units in the second, you know, last, you know, week, 2 weeks of the quarter, you’re just going to end the quarter with a lot of units in process that haven’t been reported out yet. We’ve got to take the COGS as they come in the lab, so we’re taking COGS on most of those units. We can’t recognize revenue, cannot recognize revenue until until they’re reported out. It’s just a work in process, kind of a transient issue, and I expect it to normalize over subsequent quarters. I think that was about, you know, give some grace in terms of the exact estimates. It’s a judgment call. I think that was about a 1.5% plus gross margin headwind in the quarter.

Which I think, you know, you’d spread that out over the balance of the year, and that’s just another factor that gives us confidence in bumping the gross margin guide at this point.

Dan Brennan, Analyst, TD Cowen: Great. Thank you.

Operator: Our next question comes from the line of Tycho Peterson with Jefferies. Your line is open.

Calum Kishmarsh, Analyst, Morgan Stanley4: Hey, team. This is Lauren on for Tycho. One just on Fetal Focus. Did you notice any specific, like, share trends relative to the broader market for this quarter? Kinda what are you seeing in terms of pricing pressure or competitive intensity in core women’s health overall? Then the second question just around Latitude. Following the CRC data in January, you kinda talked about additional tumor types. Have you kind of worked out what that looks like later this year? Then in terms of the reflex testing strategy, how frequently now is Latitude being used as a reflex when tissue is insufficient? How do you kinda see the Latitude volumes in the long term working out this year? Thanks.

Calum Kishmarsh, Analyst, Morgan Stanley1: Yeah, thanks. On Fetal Focus, you know, we’re feeling very good, very positive, both on the quality of the data and the volume that we’re seeing. We had a very strong Q1 in women’s health. I think we said it was the, you know, second highest number of units that we’ve added sequentially between Q4 and Q1, I think since I took over as CEO. I mean, we added 63,000 units in women’s health just between Q4 of 2025 and Q1 of 2026. You know, we think that’s incredibly strong. You know, when we look at others in the women’s health field, we think this compares, you know, very favorably. Now on Latitude, you know, of course, we’re doing very well with the CRC rollout.

We’re seeing a lot of interest from physicians. I think the majority of physicians prefer the tumor-informed products. You know, in the kind of limited cases where they’re not able to get tissue, it’s great that we have Latitude available. We’ve had a lot of great data come out there. Physicians are happy with the product. We are in a position now to reflex, you know, pretty quickly in a setting where, you know, the tissue becomes not available. We’ve built this technology platform that allows us to expand beyond CRC to other histologies, and we will be doing that in the future. We’ll give you updates on that, you know, as that progresses.

Calum Kishmarsh, Analyst, Morgan Stanley4: Great. That’s helpful. Thank you.

Operator: Our next question comes from the line of Patrick Donnelly with Citi. Your line is open.

Patrick Donnelly, Analyst, Citi: Hey, guys. Thank you for taking the question. Maybe one just on the Signatera side. It’s obviously nice to see the sequential build there. I know you guys have talked about kind of looking at the trailing four quarters on the build. Can you just talk about, I guess, the momentum you saw throughout the quarter and again, the right way to think about just that build going forward as that number continues to kind of nicely step up every quarter? Thank you, guys.

Calum Kishmarsh, Analyst, Morgan Stanley1: Thanks a lot. You know, what we’ve seen in Signatera is really, you know, consistent growth in new patients. You know, that was really continuing very strongly throughout, you know, the end of the quarter, which is a positive sign. You know, we also look at patients that are on surveillance and repeat rates and, you know, that also continues to be strong. There’s kind of a couple of dynamics now that are driving growth in the business. I think the first is doctors that have used the product become more comfortable with it, you know, start to expand their usage. That can be either deeper within a histology, for example, like within colorectal, or that can be, you know, expanding laterally to other histologies within their practice.

That’s a good vector growth for us. The second is just new customers that have never tried Signatera before. You know, I think the latest update, we said something like 45% or maybe 50% of oncologists had tried Signatera in the quarter. I don’t think we gave an updated number this quarter, but, you know, that means, you know, there’s half that haven’t. You know, obviously, we’re targeting that half. You know, every quarter, we’re seeing more and more doctors use the test. As more data comes out, I think we had several slides here on the strength of the data in Signatera in Q4 and the beginning of Q1.

I think that drives, you know, kind of both new customers and, you know, expansion within accounts. You know, 250,000 tests roughly is a lot of tests, and we’re feeling really good about that and the impact that we’re making on care, patient care. It’s also just the beginning, and we’ve invested a ton into clinical trials, into product enhancements. We’ve got some exciting things that are coming out at ASCO. We’ve got some exciting technology advancements that are launching later this year. We’re feeling like we’re in a very good position.

Patrick Donnelly, Analyst, Citi: Great. Thank you.

Operator: Our next question comes from the line of Subbu Nambi with Guggenheim. Your line is open.

Calum Kishmarsh, Analyst, Morgan Stanley2: Hey, guys. Thank you for taking my question. I have just one. One of the leading players in the rare disease market has had some challenges with reimbursement and mix. Is this dynamic relevant for you? Bigger picture, how is Zenith ramping, and how are you differentiating there? Thank you.

Calum Kishmarsh, Analyst, Morgan Stanley1: Yeah. Thanks a lot. We launched our rare disease product called Zenith. You know, it’s going really well so far. You know, obviously, volume is relatively low just at this stage in the launch, but we feel really good about the product offering and the feedback that we’ve gotten from physicians so far. We’re not really impacted by any of the dynamics that I think others have highlighted just because we’re pretty early on. You know, it’s sort of all upside to us at this point. I think there’s a lot of opportunity there, and it’s a new growth vector for us. We’ve got a lot of new areas of growth. You know, rare disease is one.

I think, you know, another one that is really near term and very, very large is early cancer detection for CRC. Alex talked about that a little bit in the prepared remarks, you know, we’re gonna be done with the trial in a couple of months. I think that’s gonna put us in a great position to commercialize in the near future and be submitting to FDA in 2027.

Calum Kishmarsh, Analyst, Morgan Stanley2: Should we expect data readout end of this year, or would that be early next year?

Calum Kishmarsh, Analyst, Morgan Stanley1: ECD data will be read out from the definitive trial in 2027.

Calum Kishmarsh, Analyst, Morgan Stanley2: Okay. Perfect. Thank you so much, sir.

Calum Kishmarsh, Analyst, Morgan Stanley1: Sure.

Operator: Our next question comes from the line of Daniel Markowitz with Evercore ISI. Your line is open.

Calum Kishmarsh, Analyst, Morgan Stanley3: Hi, guys. This is Mackenzie on for Daniel. Thanks for taking my questions. I was just wondering if you could talk a little bit more about the CRC launch in Japan. It sounds like that could come in the back half of this year. Can you talk about visibility to adoption and what that ramp might look like? My follow-up is, can you give us an update on any momentum or other developments in the biomarker states? Thanks.

Calum Kishmarsh, Analyst, Morgan Stanley1: That sounds good. I just want to clarify one thing I mentioned earlier, too. On women’s health, we grew 63,000 units quarter-over-quarter in Q4 2025 to Q1 of 2026. That really doesn’t count at all the Fetal Focus orders that we’ve received. Only 2,000 of Fetal Focus are counted in that number. You know, the vast majority of that 63,000 are just Panorama and Horizon orders because if Horizon is negative and Fetal Focus is ordered, we don’t actually count that in our numbers. We could be counting the growth as a number that’s much higher.

That $63,000 is really just the core women’s health business, Panorama and Horizon, growing between Q4 2025 and Q1 2026, which we think is very significant, especially when you look at the competitive readouts that have come over the last couple of days in the women’s health space. That gives you a sense of sort of how we’re doing. On Japan, I’ll make a couple of comments, and I’ll hand it over to Solomon Moshkevich and Alexey Aleshin. Japan, we know, has the same number of CRC diagnoses per year as what we see in the U.S. 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. Now all that’s happening.

I think we’re, you know, less than six months away from all that happening and being off to the races in Japan. We’ve had a lot of really good conversations, and things are on track. We’re feeling very positive. I think, you know, initially the goal is to kinda have that initial time point covered and then, you know, move on and down the road, you know, get surveillance covered and I think be off to the races. Solomon or Alex, do you guys wanna comment on opportunities in Japan?

Calum Kishmarsh, Analyst, Morgan Stanley0: Yeah. This is Solomon. So, you know, two elements here. I think the questions were about what, you know, what to expect in Japan. Given some of Alex’s comments, what we know about it already being in the guidelines, MRD being recommended in several major guidelines of medical societies, you know, we do expect pretty significant adoption post-approval and post-reimbursement. You know, it’s hard to say exactly right now, you know, what the, what the units might look like. I think that’s something we’ll provide in the future as we tighten up the models. I think on the, on the pricing side as well, you know, as we discussed on the call today, there’s strong health economic rationale in addition to clinical rationale.

We think we’re in a good position, from to negotiate solid pricing with the Japanese ministry. That’s something that would happen post-regulatory approval, so we’d have to operate sequentially. We’ll provide updates on that once we have clarity towards the end of the year ahead of our launch. We’re really looking forward to making a big impact and helping CRC patients in Japan.

Operator: Our next question comes from the line of Calum Kishmarsh with Morgan Stanley. Your line is open.

Calum Kishmarsh, Analyst, Morgan Stanley: Hey, guys. Thanks a lot for taking the question. Mike, could you maybe just help us understand how the cost ramp could look for the screening asset, I guess, between R&D and the commercial costs down the line, too? It’s obviously a pretty different cost profile to the core business, but just help us to split the two from one another as possible and how we could expect that to shape from, you know, through 26 and beyond. Just to follow up, on Signatera, can you maybe just talk through what momentum you’re seeing in terms of kind of same-store sales, I guess, versus new additions, just as we think about kind of market penetration? I guess it’s a depth versus breadth question. Thanks a lot, guys.

Calum Kishmarsh, Analyst, Morgan Stanley1: Yeah, gotcha. Look, to your point, there’s two components to the cost for the ECD launch. One, you’ve got the R&D costs associated with the FIND trial. Secondly, you’ve got kind of the commercialization and launch costs, which would be SG&A. For the FIND trial itself, you know, we’re way down the path now. I mean, the guys gave you the update about how close we are now to completing enrollment, and then we’ve got to make the spend to run the samples. That, we think, is largely reflected now in the guide.

We bumped the guide in R&D this quarter specifically because just the ramp of that enrollment was much quicker than we anticipated, which is, to my mind, is a great sign. Beyond that, I mean, I think the only variable would be if there’s additional things we can do to further accelerate, then we’ll be opportunistic and we’ll try and do that. I think that’s largely put in now to the R&D spend. A lot of that will be incurred this year and perhaps early next year in terms of running the samples, but that would be within the context of our kind of normal R&D budgeting process.

Secondly, on the commercialization front, you know, we’ve talked about this before, but, you know, we’ve got, you know, we feel like we’ve got some good channels to leverage in the commercialization of the asset. In terms of kind of building out, you know, a larger commercial channel specific to ECD. We’re not going to do the thing where we, you know, hire 1,000 sales reps and hope that that works out. We will leg into this. We’ll build, you know, that call point incrementally as we deliver volume. I think our experience in the primary care call point via the OBGYN channel gives us a ton of experience in terms of understanding where to build first, right?

We’ll kind of build into that and we’ll build on top of that sales team on the back of success, just the same exact way that we did in women’s health and then subsequently in oncology.

Operator: Our next question comes from the line of Casey Woodring with JP Morgan. Your line is open.

Casey Woodring, Analyst, JP Morgan: Great. thanks for taking my questions. Steve, you mentioned in your prepared remarks that you’re seeing the reps that you added last year start to contribute to MRD growth in a real way. I guess, where are you with getting that cohort of new MRD reps up to speed and fully productive? I guess, like, how much more runway is there for Signatera growth from those reps ramping, or would you say that they’re fully ramped at this point? Thank you.

Calum Kishmarsh, Analyst, Morgan Stanley1: Yes. I would say we’re probably, like, between 50% and 75% ramped. You know, I think they’re really starting to become productive here kind of mid and through Q1 and turning the quarter into Q2. You know, there’s still a little bit more juice to squeeze there. And that’s, you know, contributing, I think, both, you know, targeting new customers, but also helping with cross-selling, you know, with just some of the specialization that we have on some of those reps. You know, we’re feeling positive about that. You know, we’ve also, you know, been investing in medical education and I think that’s going well. I do think we’ll continue to see the momentum, you know, coming out of these initiatives.

you know, we had record numbers and, you know, we continue to see, you know, very, very strong growth, you know. Leaving the quarter, we were seeing that same kind of very strong trajectory that we’ve seen. So we’re feeling very positive about it. Also a lot of growth starting to come from, you know, some of these new areas that, once they get going, you know, things like lymphoma, for example. These are big markets that by themselves would be their own company. We’ve got, you know, 15 of those. As those things start to get going, the flywheel starts turning, there’s gonna be some big opportunities.

You know, the other thing I’ll mention on that too, just since no one’s asked about it yet, I think is just initiatives within pharma. Some of the reps that we added, were actually reps that are focusing on Natera’s data business, where we have a really unique capability, reps that are focusing on our AI tools, where we have really unique capability that nobody else can touch, or reps that are focusing on our pharma sales in oncology. We’re seeing, like, an incredible amount of momentum there, in that overall business. There’s been, you know, definitely some hiring there, and they’re starting to hit their stride, and I think that’s something we can, you know, you can expect to be hearing a lot more about as that continues.

Tons of interest there. We had a lot of interest, you know, but I think that was really expanded by the acquisition of Foresight Diagnostics and this extreme ultrasensitive levels that we’re getting with the phased variant technology. Tons of interest there, a lot from pharma, and that’s another area of excitement.

Casey Woodring, Analyst, JP Morgan: Got it. Thanks, guys.

Operator: Our next question comes from the line of Catherine Schulte with Baird. Your line is open.

Catherine Schulte, Analyst, Baird: Hey, guys. Thanks for the questions. Maybe first, you know, we’ve heard some others in the space calling out weather as an impact in the quarter. Clearly volumes were very strong for you guys, but did you see any kind of winter storm impact?

Calum Kishmarsh, Analyst, Morgan Stanley1: Yeah. That’s a good question. We, we did, and, you know, I don’t think we called that out in the prepared remarks, but, you know, certainly I think those storms that kind of hit in the maybe the end of January or somewhere in that timeframe, we saw that there was just a step down in units, and we tried hard to recover a lot of those, but we definitely were not able to get the full recovery there. You know, I mean, despite having a record quarter, really across the board and record growth in oncology, certainly it would have been much faster had we not had those storms. We didn’t really call it out just because we, you know, we did so well despite those happening.

Catherine Schulte, Analyst, Baird: Okay. Great. Maybe for Signatera, you know, what portion of patients would you say are adhering to kind of the surveillance schedule that you guys have laid out? Just curious if you think there’s some untapped utilization there in the surveillance setting.

Calum Kishmarsh, Analyst, Morgan Stanley1: You know, that’s obviously something we sort of pay attention to. You know, we’ve seen pretty consistent usage in surveillance over time. You know, it depends how many years out the patient is. You know, I think, like, in colorectal, we’ve seen a protocol sort of 4 times a year, you know, for the first year and then 2 times a year thereafter. I think that’s kind of mirroring closely to, you know, what you see with CEA. You know, not everybody stays on that and, you know, sometimes the patients recur. Sometimes unfortunately, they pass away. You know, sometimes they just feel like You know, they’re, they’ve moved on, and they don’t wanna keep getting monitored.

We do see good adherence, but of course, that’s something that we always are trying to increase. You know, there’s certain doctors that don’t believe in it, and that’s an upside opportunity for us because as more data comes out and, you know, as they start to believe more and more in surveillance, that’s more tests that we’ll do. There’s very many that do believe in it and that really try hard to keep their patients on a consistent protocol, and I think that’s a big reason why you’re seeing the growth driving the way that it is.

Operator: Great. Thank you. Our next question comes from the line of Puneet Souda with Leerink Partners. Your line is open.

Puneet Souda, Analyst, Leerink Partners: Yeah. Hi, guys. Thanks, here. First one on prior authorization. There has been some news lately in terms from CMS on and also some of the larger payers on prior authorization. Just wondering, you know, how often do you see prior authorizations and, you know, on either on Signatera, other products, and to what extent do, you know, do you think payers reducing the prior authorization here would be a tailwind for you this year? Just very quickly on Foresight, you know, are you launching any Signatera with phased variants yet in the clinic? Any reception there? Any feedback there? I appreciate that clinical data takes time to build from the higher performance of the assay, but just wanted to get some any early reads. Thank you.

Calum Kishmarsh, Analyst, Morgan Stanley1: Yeah. Let me comment on that, and then maybe Solomon and Mike, if you wanna comment. First on prior auth, I would say that’s definitely been a tool that, you know, payers have used to not pay even for covered services. Any action that limits prior auth for covered services is going to help our ASPs. You know, we commend the kind of strategies around that to make access to care easier for covered services. We do think that that’s an upside opportunity for us. Can’t remember the second question right now.

Puneet Souda, Analyst, Leerink Partners: Yeah. Foresight.

Calum Kishmarsh, Analyst, Morgan Stanley1: What?

Puneet Souda, Analyst, Leerink Partners: Yeah. No, around Foresight performance.

Calum Kishmarsh, Analyst, Morgan Stanley1: Yeah. Sorry. Sorry. Yeah. get too fired up about prior auth.

Puneet Souda, Analyst, Leerink Partners: Do you want me to jump in?

Calum Kishmarsh, Analyst, Morgan Stanley1: I’ll just say that Foresight is kind of getting ready to launch and, you know, there’s a ton of excitement from physicians. Solomon, why don’t you jump in on that?

Calum Kishmarsh, Analyst, Morgan Stanley0: Yeah. As we said, we’re planning to launch an updated version of the Signatera genome-based assay that’ll include phased variants. That’s coming later this year, and we’re looking forward to that. It’s already available in the research setting for pharma and for academic researchers. I would say that has driven a lot of excitement and a lot of additional conversations. I think we might have mentioned previously that we already have at least one more major pharma-sponsored trial that’s been contracted that we haven’t yet announced that’s leveraging that capability. On the clinical side, I don’t think this is necessarily holding anyone back. You know, people, especially hematologists treating patients with lymphoma, they’re just excited to be able to order Signatera for their patients.

We showed incredible data at ASH in December on the performance of the current Signatera assay for patients with lymphoma. That, together with, you know, our partnership with Foresight and the reputation in that setting has already driven an inflection point that we’re seeing on people’s willingness and enthusiasm about ordering MRD for those patients, especially given that it’s in the guidelines. You know, I don’t see a lot of physicians holding back and saying, "We’re gonna wait." in order to get started. We’re feeling good about this area.

Puneet Souda, Analyst, Leerink Partners: G-Got it. And then, uh, just-

Operator: Looks like we lost our caller. Ladies and gentlemen, that will conclude our question and answer session and today’s call. We thank you for your participation, and you may now disconnect.