- Revenue Growth: Q2 2025 revenue reached $547M (+32% YoY; +34% ex-revenue true-ups), with full-year guidance raised to $2.02–$2.1B (up $80M midpoint).
- Signatera Expansion: Achieved record 20,000-unit quarterly growth, driven by new patient starts and potential $250–$300M revenue from expanded tumor-type coverage.
- Gross Margin Improvement: Rose to 63.4% (vs. 59% YoY), with guidance updated to 61–64%, despite higher exome volumes for Signatera.
- Operational Efficiency: Maintained flat operating expenses despite $80M revenue guidance increase, prioritizing AI, commercial expansion, and revenue cycle investments.
Signatera Performance Fuels Growth
Signatera, Natera's oncology testing product, was the star performer, achieving record growth with 20,000 unit adds in the quarter. This strong performance was fueled by positive ASCO GI data, expanding usage into new histologies, and a growing number of new patient starts. The company expects to launch its new LATITUDE test for tumor-naive patients in mid-2025, which is expected to further boost Signatera's growth trajectory.
Expanding Product Portfolio and New Opportunities
Natera is actively expanding its product portfolio, with several new product launches planned for this year, primarily focused on minimal residual disease (MRD). The company is also making significant investments in AI, expecting to see revenue from these initiatives in the coming years. Natera sees significant opportunity in the transplant monitoring market (TOMR), leveraging its Signatera test to identify patients at risk of recurrence and guide treatment decisions.
Valuation and Outlook
Despite the strong performance and growth prospects, Natera's stock is currently trading at a high valuation. The company's P/S ratio of 11.33 suggests that investors are pricing in continued high growth. However, the company's negative EPS and low profitability metrics raise concerns about its ability to sustain this growth and generate shareholder value in the long term. The company's focus on expanding access to its products through reimbursement coverage and strategic partnerships will be crucial to its success.