Guardant Health ((GH)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Guardant Health’s recent earnings call revealed a positive sentiment, highlighting strong revenue growth and operational achievements. The company’s success in its oncology and Shield testing businesses, alongside strategic partnerships and improved gross margins, underscores its robust market position. However, challenges such as increased operating expenses and uncertainties in future reimbursement and guideline inclusion were also acknowledged.
Record Revenue Growth
Guardant Health achieved a remarkable 39% year-over-year revenue growth, reaching $265 million in Q3 2025. This milestone marks the first time the company has crossed over $1 billion in annualized revenue, showcasing its strong market performance and growth trajectory.
Oncology Volume Acceleration
The company reported a significant 40% increase in oncology volumes year-over-year, with approximately 74,000 tests conducted. The Guardant360 Liquid test has been a key driver, delivering its fifth consecutive quarter of accelerating growth, reinforcing Guardant Health’s leadership in the oncology space.
Biopharma and Data Business Growth
Guardant Health’s biopharma and data business saw an 18% revenue increase year-over-year, supported by the achievement of two additional companion diagnostic approvals during the quarter. This growth highlights the company’s expanding influence in the biopharma sector.
Shield Testing Revenue Surge
The Shield testing segment generated $24 million in revenue for Q3, driven by 24,000 tests and average selling prices (ASPs) close to $900. Strong adherence rates contributed to this surge, indicating robust demand for Guardant’s screening products.
Gross Margin Improvement
The company’s non-GAAP gross margin improved to 66% in Q3 2025, up from 63% in the prior year period. This improvement was driven by reductions in Reveal COGS and enhancements in Shield’s gross margin, reflecting operational efficiencies.
Positive Free Cash Flow
Excluding the screening business, Guardant Health achieved positive free cash flow one quarter ahead of expectations, demonstrating effective financial management and operational success.
Strategic Partnerships
Guardant Health announced collaborations with Quest Diagnostics and PathGroup, aimed at expanding Shield access and accelerating the build-out of its commercial infrastructure. These partnerships are pivotal for the company’s strategic growth initiatives.
Non-GAAP Operating Expenses Increase
Non-GAAP operating expenses rose by 22% year-over-year to $228.8 million. This increase was driven by investments in expanding the screening commercial infrastructure and sales/marketing efforts for Shield, indicating a focus on future growth.
Uncertainty in Commercial Reimbursement
There is ongoing uncertainty regarding commercial reimbursement for Shield, particularly concerning the potential decrease in ASPs from $900 to $700 by 2028. This presents a challenge for Guardant Health’s future revenue projections.
Potential Delays in Guideline Inclusion
The inclusion of Shield in the American Cancer Society guidelines is not guaranteed this year, which could delay broader patient access and commercial reimbursement, posing a potential hurdle for the company’s market expansion.
Forward-Looking Guidance
Guardant Health’s forward-looking guidance remains optimistic, with the company raising its full-year 2025 revenue guidance to a range of $965 million to $970 million. This upward revision is supported by strong ongoing demand, strategic initiatives, and new partnerships, reflecting confidence in sustained growth.
In conclusion, Guardant Health’s earnings call conveyed a positive outlook, driven by impressive revenue growth and strategic advancements. While challenges such as increased expenses and reimbursement uncertainties exist, the company’s proactive strategies and partnerships position it well for future success.