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

By Unknown May 17, 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 the significant progress being made across Guardant Health's range of offerings. This advancement is fueled by substantial improvements to their products and the introduction of Shield. He underscored the company's commitment to aiding patients through every phase of their battle with cancer, starting from initial diagnosis all the way through choosing appropriate treatments.
In Q1, revenues climbed 21% compared to the previous year, totaling $203 million. The oncology segment saw an increase of 20%, reaching $151 million, driven by a volume surge of 25% up to around 59,000 tests. Both Guardant360 and Reveal were key contributors to this expansion.
Guardant360 saw an increase in average selling price to $3,000-$3,100, bolstered by better Medicare and commercial reimbursement. Reveal turned profitable with respect to gross margins, thanks to a 50% decrease in cost of goods sold.
AmirAli Talasaz, who serves as Co-CEO, highlighted the favorable progress of Shield, which generated $5.7 million in revenue and conducted around 9,000 tests during the first quarter. The acquisition of ADLT status by Shield led to an increase in 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 63% recorded in Q1 2024. The growth was attributed to increased average selling prices (ASPs) for oncology products along with decreased costs associated with Reveal and Shield operations.

Outlook

The firm has increased its projected revenues for 2025 to between $880 million and $890 million, indicating a growth of 19% to 20% over the figures from 2024.
The anticipated growth for oncology revenue is around 18% compared to last year, while the overall oncology volume is forecasted to increase by more than 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 status and greater anticipated testing numbers.
Guardant Health anticipates full-year non-GAAP gross margins between 62% and 63%, due to advancements in average selling prices and increased cost efficiency.

Financial Results

A1 The overall revenue amounted to $203.5 million, of which $150.6 million was contributed by oncology. Advances in oncology average sales price (ASP) along with an increase in volume 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 growth 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 scheduling of bonus payments; however, this was better than the previous year when adjusted. By the end of Q1, Guardant had $804 million in cash and equivalent assets.

Q&A

Mark Massaro from BTIG inquired about what was driving the increased pace in oncology volumes. Helmy Eltoukhy clarified that factors such as advancements in technology, specifically mentioning the smart liquid biopsy platform, along with enhanced order complexity, were key contributors to this expansion.
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 highlighted the likelihood of enhanced sales performance and inclusion in guidelines as positive factors, while emphasizing that these were offset by targeted efforts aimed at risk reduction.
Bill Bonello from Craig-Hallum asked about the uptake of tissue tests and their competitive stance. Eltoukhy highlighted the advantages of decreased tissue needs along with expanded genomic capacities.

Sentiment Analysis

Experts showed guarded enthusiasm, emphasizing volume increases and enhancements in reimbursements as primary catalysts.
The management kept an assured stance, emphasizing notable accomplishments in operations and key strategic landmarks.
In comparison to the prior quarter, the management's attitude indicated greater confidence in growing Shield and increasing oncology caseloads.

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 volume guidance for Shield increased from 45,000-50,000 tests to 52,000-58,000, backed by ADLT status and an elevated ASP.
The non-GAAP gross margin enhanced to 65% in the first quarter from 63% in the prior year, indicating operational improvements.
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 during their initial period.
Experts expressed worries regarding insurance coverage beyond Medicare and the speed at which new items such as Shield and Guardant360 Tissue would be embraced by the market.
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 both revenue and oncology volumes. Notable achievements were Shield attaining ADLT certification along with reaching profitability margins for Reveal and Shield products. The firm has also updated its annual revenue forecast upwardly, signaling trust in their product lineup and efficient operations. Leadership continues to prioritize expansion strategies for Shield and enhancing average selling prices as part of an overarching plan aimed at fostering sustainable future development.

Review the complete earnings call transcript here.