Natera Inc (NTRA) 2025 Q4 法說會逐字稿

Welcome to Natera's 2025 fourth quarter financial results conference call. (Operator Instructions) As a reminder, this call is being recorded today, February 26, 2026.

I would now like to turn the conference over to Michael Brophy, Chief Financial Officer. Michael, please go ahead.

Thanks, operator. Good afternoon. Thank you for joining our conference call to discuss the results of our fourth quarter of 2025. On the line, I'm joined by Steve Chapman, our CEO; Solomon Moshkevich, President, Clinical Diagnostics; Alexey Aleshin, General Manager of Oncology and our Chief Medical Officer; and John Fesko, President, Chief Business 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 site as soon as it's available. Starting on slide 2. During the course of this conference call, we will be making 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 various 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 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, February 26, 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. And unless otherwise noted, each such reference represents a year on year comparison.

And now I'd like to turn the call over to Steve. Steve?

Great. Thanks, Mike. Let's get to the highlights on the next slide. We had a fantastic quarter. We processed about 924,000 tests and set another record for MRD clinical unit growth with 225,000 tests processed in Q4.

MRD clinical units grew about 56% compared to Q4 of 2024. We generated roughly $666 million in revenue in the quarter, which is about $6 million ahead of our preannounced in January and represents approximately 40% revenue growth over Q4 of 2024. We were very pleased to generate a gross margin of 66.9% in the quarter, which wasn't part of our preannounced and was well ahead of our expectations. All of that progress led us to generate over $107 million in cash flow in 2025, even as we double down on growth investments throughout the course of the year.

We're off to a great start so far in 2026, and we are excited to initiate our guide for the year. We expect to generate between $2.62 billion and $2.7 billion in revenues, gross margins between 63% and 65%, holding SG&A stable while we make targeted investments in R&D with the expectation that we generate another strong cash flow year in 2026. Mike will spend a lot more time on this topic later in the call. We've had a lot of exciting news since the JPM conference in January, including publishing the outstanding performance of our Latitude Tissue-Free MRD test, which has now been submitted to MolDx and launching the 21-gene Fetal Focus single-gene NIPT test. Data on Fetal Focus was just awarded an oral plenary presentation at the Society of Maternal-Fetal Medicine Conference, the only single-gene NIPT to earn that honor.

It's worth reflecting for a moment on the progress we made in 2025. We had a transformative year financially with 40% quarter over quarter revenue growth and significant gross margin expansion, while at the same time, continuing to invest in our future. In a few years, when we look back on it, I think the key investments we made in our commercial channels, product launches and clinical studies will prove to be engines for continued growth. You can see here on the page just a few of the product highlights.

We significantly expanded our MRD product portfolio by launching the genome version of Signatera and the Latitude MRD test, both of which complement Signatera beautifully. We delivered the strongest year yet for Signatera data generation, highlighted by the IMvigor011 publication in the New England Journal. Then at the end of the year, we welcomed Foresight Diagnostics to the fold, which gives us the phased variant technology, which unlocks the next level of ultrasensitivity is already paying dividends as we'll discuss today. We also advanced organ health and women's health with significant investments in products like Fetal Focus and key studies like the randomized ACES-EMB trial in organ transplant.

Okay. Let's get into some of the business trends on the next slide. I want to jump straight to MRD clinical unit volume. Q4 represented yet another record growth quarter. Based on our internal data, we estimate that more than 50% of oncologists in the United States ordered a Signatera test in the quarter, which just shows you the extent to which MRD is rapidly becoming a part of the standard of care for many cancer patients. Physicians continue to show a desire to adopt MRD broadly in their practice, which plays to our strength given the breadth and quality of our data. We're off to a great start so far in Q1.

The next slide shows revenues, which was another area of significant outperformance this quarter. As I mentioned, we came in about $6 million ahead of the preannounced on very strong overall volume growth and another quarter of sequential improvement in ASPs. We had an excellent oncology quarter and continued to see strength in women's health and organ health. Signatera ASPs stepped up to roughly $1,225 in Q4. We had about $60 million in true up this quarter, consistent with our preannounced as cash collections continue to accelerate, and we posted another record for DSOs at 47 days compared to 68 days just in Q4 of 2024.

The next slide shows our gross margin traction over time, and we had excellent margin execution in Q4. Top line gross margins were a record, as I mentioned, at 66.9%, and we had about 3% of that is benefit from the revenue true-ups. Stripping out the true-ups, we posted a record organic gross margin quarter at 63.7%. Along with strong ASPs, we had a very lean COGS quarter in Q4, which drove significant organic step-up of 240 basis points just compared to the third quarter.

Looking into 2026 and beyond, we've got a strong set of margin expansion opportunities, and we think the cash collection trend continues to bode well for ASPs into 2026. To further improve ASPs, we've submitted for much broader Medicare reimbursement for Signatera. As a reminder, a portion of the tests that we perform today are in indications that aren't yet covered by Medicare, but where we submitted for coverage. We have a good track record of getting coverage given the quality of our data, so this could be an opportunity.

We are also starting to see commercial payers come on given the breadth of progress that's been made on the biomarker states. In addition, we are increasingly seeing opportunities to deploy AI-enabled workflows to help ensure that we get reimbursed for covered services. Mike will spend a little more time on this in his section. We have several COGS opportunities underway as well that will hit throughout the year, including both lab workflow opportunities and also deployment of AI to reduce many routine manual steps. All in, we're in a good position for margin expansion going forward.

Okay. With that, let me turn it over to Solomon to discuss more details. Solomon?

Thanks, Steve. Getting into some of our recent data and announcements, I want to begin in our women's health business with Fetal Focus, our next-generation single-gene NIPT. This test powered by Natera's ultra-sensitive LinkedSNP technology, directly analyzes fetal cell-free DNA to screen for serious inherited conditions. It addresses a significant clinical unmet need by enabling fetal risk assessment when the mother is a carrier of a recessive mutation, but the father is unavailable for screening, a common real-world challenge in prenatal care.

Our expanded 21-gene offering announced in early January is the broadest single-gene NIPT product in the market with impressive flexibility as it can either be ordered upfront along with the Horizon carrier screen or it can be ordered later after Horizon carrier status has already been reported. The test performance is robust with overall sensitivity across conditions of 96% and overall population-weighted specificity of 98%. The competitive strength of this product offering is fueling meaningful growth in new OB/GYN and MFM accounts.

Of course, a major source of strength for Fetal Focus is its prospective blinded validation in the EXPAND trial with confirmed genetic outcomes on all positives and negatives. The EXPAND trial was selected for an oral plenary presentation earlier this month at the Society for Maternal Fetal Medicine Annual Meeting. Scoring an oral plenary at SMFM is extremely rare, even in the age of cell-free DNA. So it's a strong indicator of the scientific and clinical relevance of this work. We're pleased with the feedback during and after the conference, and we look forward to submitting these results for publication in a leading peer-reviewed journal. We also look forward to significant new product enhancements in 2026 for our women's health customers to be announced in the future.

Moving to the organ health portfolio now. We continue to invest meaningfully improving the clinical utility of Prospera donor DNA monitoring across all organ types. In addition to the early detection and treatment of graft injury, our vision is that Prospera can also help reduce unnecessary biopsies and unnecessary immunosuppression.

In the field of heart transplant, we recently completed enrollment in the novel ACES-EMB trial, the first randomized controlled study directly comparing surveillance with Prospera against protocol endomyocardial biopsies or EMB. Protocol EMB, which often occur monthly or even more in year one post transplant is currently the standard of care for the approximately 4,500 patients per year in the US, who receive heart transplants. So the goal of the trial is to show that patients can safely avoid most of those protocol biopsies.

ACES-EMB has enrolled over 300 patients across 17 transplant centers in the US randomizing participants one month after transplant to surveillance either with Prospera or with EMB in a 2:1 ratio with clinical follow-up for 12 months. We look forward to reading out the results in mid-2027 once all follow-up data has been collected and analyzed.

Complementing this approach now on the lung side, new data recently published in the Journal Transplantation Direct highlights how Prospera-guided monitoring can reduce unnecessary surveillance biopsies for lung transplant recipients. Lung transplant patients are typically monitored with transbronchial biopsies usually 5x or more in the first year after transplantation. These procedures are invasive, risky and associated with significant potential morbidity.

In this study, the Ohio State University, Wexner Medical Center performed a prospective study incorporating Prospera monitoring into routine care. Based on low-risk Prospera results, clinicians elected to forgo the 9-month surveillance biopsy in about 75% of patients. Over the ensuing three months, those patients experienced no significant differences in acute rejection rates, lung function metrics or immunologic markers compared with patients who did undergo the biopsy. This is an important validation of the biopsy reduction concept in lung transplant, and we already see it driving engagement among clinical leaders in thoracic transplantation. Strong clinical data like this has continued to fuel meaningful share gains for Prospera in thoracic as well as renal transplantation.

And with that, I want to turn it over to Alex to discuss our most recent data in oncology. Alex?

Thanks, Solomon. Here, we're highlighting what we view as exceptional momentum in bladder cancer going into the ASCO GU conference. At a single meeting alone, we have strong set of abstracts and oral presentations that collectively reinforce the critical role of Signatera across the bladder cancer continuum from risk stratification to treatment selection to enabling new care pathways like bladder preservation. A key theme here is, can we spare the bladder, which we think is one of the most important clinical questions in the field. Studies such as INDIBLADE and RETAIN show that CTA-negative patients who underwent active surveillance had similar outcomes to CTA-negative patients who had a cystectomy, suggesting that Signatera can identify candidates for bladder-sparing approaches, potentially avoiding or delaying radical surgery in appropriate patients.

And finally, data sets like NIAGARA point to the next frontier, combining ctDNA and urinary tumor DNA to provide complementary insights into residual disease risk and local disease biology, a direction we believe can further strengthen patient selection for bladder preservation strategies and expand market size across urologic malignancies. The takeaway is ASCO GU is one conference, but it's a great example of the consistent drumbeat we're driving using high-impact data to expand Signatera into new indications and to deepen penetration across existing workflows. And importantly, we are executing this playbook across multiple histologies.

Moving to the next slide. We're highlighting exciting interventional data in head and neck cancer from the Phase II SYNERGY trial in frontline recurrent or metastatic head and neck squamous cell carcinoma. What makes SYNERGY especially important is that it's not just showing ctDNA is prognostic, it demonstrates the benefit of CTA-guided treatment and adaptation in real time. Here's the clinical problem SYNERGY addresses.

In advanced head and neck cancer, physicians face a difficult sequencing decision, start with immunotherapy alone and risk undertreating patients who need a rapid cytoreduction or start with immune therapy plus chemotherapy and risk overtreating patients who may not need prolonged chemotherapy exposure. The question is whether we can achieve the best of both worlds using Signatera-guided adaptive treatment approaches.

In the study, patients started on either pembrolizumab alone or pembrolizumab plus chemotherapy. And then Signatera ctDNA dynamics were used to escalate or deescalate chemotherapy in real time. The first important result is that 74% of patients deescalated a chemotherapy at least once with a median of two chemotherapy cycles delivered versus the typical six cycles. This is a meaningful reduction in chemotherapy. And the question is how that affected patient outcomes. Amazingly, the outcome showed an objective response rate of 63%, which is really strong compared to the 19% to 36% seen in the original registrational trial.

And importantly, the rate of grade 3 or higher toxicity was only 48%, which is a clear improvement over historical precedents. The punchline is that SYNERGY supports a future where Signatera becomes a treatment navigation tool in the metastatic setting in head and neck cancer and across other cancer types, helping physicians and patients optimize their therapeutic strategy in real time.

Furthermore, this head and neck indication is already covered by MolDX under our IO treatment response monitoring indication. We expect multiple similar studies to read out over the next few years, a testament to our investment into prospective clinical evidence generation that started many years ago.

With this, let me turn it over to John to discuss progress on our MolDx submission and our face variant technology. John?

Thanks, Alex. I'm excited to announce that Natera has submitted our first tissue-free MRD assay to MolDX in colorectal cancer. Latitude is a methylation-based assay that delivers MRD insight without needing tumor tissue, making it a strong complement to our flagship Signatera platform, enabling MRD assessment even when tissue is unavailable, insufficient or delayed.

In January, we published clinical validation from the GALAXY study in npj Precision Oncology. In a large data set spanning 195 patients and 1,230 time points, Latitude MRD positivity was highly prognostic for recurrence. With a hazard ratio of 10 post surgery, a hazard ratio of 31.9 in post-treatment surveillance, 84% longitudinal sensitivity, 97% sample level specificity and a 4.6-month median lead time ahead of imaging. When you look across published tissue-free MRD assays in CRC, we think these performance metrics are excellent. Importantly, the data also support clinical actionability and include a predictive signal for adjuvant chemotherapy benefit.

Our recently submitted technical assessment is a key step towards broader reimbursement and scaled adoption in CRC and another driver of MRD growth as we expand access and streamline ordering. We also look forward to validating this tissue-free technology for other cancer types later this year. Beyond Latitude, Natera also has a full suite of Signatera submissions now under review by MolDX in a broad range of histologies, and we are excited to further expand insurance coverage for cancer patients.

Moving on, I also want to describe an exciting new technology that we have integrated into our tumor-informed Signatera platform, phased variance that is driving our detection thresholds down to unprecedented levels, below one fragment of tumor DNA in a background of 10 million normal copies. As a reminder, Natera closed the acquisition of Foresight Diagnostics in December and immediately integrated phased variants into our Signatera platform, where we expect it to enhance performance in MRD across solid tumors.

This product is available today for research use and will be launched clinically this year. So what are phase variants and why do they matter? Tumor-informed MRD testing has traditionally focused on identifying ctDNA with single tumor-derived variants. Phase variant takes this concept further. Instead of looking for a single mutation on a fragment of ctDNA, we look for two or more mutations on the same physical DNA fragment. What makes phase variants powerful is not simply tracking more mutations, but rather how this approach fundamentally reduces the impact of background errors and enables vastly better sensitivity.

Background errors that are routinely introduced through sequencing chemistry, artifacts and biology can become an issue at very low tumor fractions. But with phase variants, the probability that such errors identically replicate multiple variants on a single fragment is so low as to be almost 0. So that dramatic reduction in air is what enables confident detection at thresholds 10 to 100 times lower than conventional approaches. Analytically, this translates into an LOD95 of approximately three parts per 10 million and detection below one part per 10 million. And this technology is backed by very strong patents.

Clinically, we believe this further widens our moat in MRD test performance. It's also a fantastic addition to our pharma services offering, generating significant excitement with partners. In fact, we've already signed an important prospective pivotal trial, which we'll be announcing when it kicks off.

With this, let me turn it over to Mike to review the financials. Mike?

Great. Thanks, John. The next page is just a summary of the financials compared to last year. You can see what an impactful year 2025 was in terms of revenue scaling and gross margin improvement. Steve noted that we put up a very strong gross margin here in Q4.

And while the core ASP and COGS trends do look very strong, I think we also benefited from a few tailwinds specific to the quarter. For example, we had a nice high-margin contribution from pharma in Q4 and our reported units ratio to test a session in the lab was a little higher than usual. That tends to help gross margins because we only book revenues on the tests that have been fully reported out.

I would also note that we significantly narrowed our operating losses in Q4 as compared to last year, even as we significantly stepped up our investments in OpEx. We actually generated net income in Q4, although that was helped along by a one-timer, which was a below-the-line deferred tax item related to the Foresight acquisition. We think our path to profitability remains very clear, and we are sticking to the plan we've laid out in the past. We fully intend to keep our foot on the gas in terms of investing in the business as we grow our way to profitability. Finally, on this slide, you'll just note that our balance sheet remains pristine with over $1 billion in cash and securities.

Okay. Let's get to the guide on the next slide. Steve previewed the key pieces on revenues and gross margins, and we are well positioned to generate cash again this year. I'll just remind you that consistent with prior years, this guide does not presume any meaningful contribution from revenue true-ups. We will likely have some true-up benefit in '26, but I expect true-ups as a percent of revenue to decline as we continue to ring out the towel on all of the operational improvements we've launched in revenue cycle management over the last few years.

Beyond that, it's important for you to think about our underlying trends and unit economics. And I think guiding with future true-ups stripped out of the forecast makes it easier to understand and model the business.

That's important context for evaluating year on year trends. For example, our gross margin for 2025 ex true-ups was about 61.5%, so centering the guide at 64% for this year represents our expectation that we continue to ring the bell on COGS improvements and additional ASP gains. I'd also note that we are exhibiting some caution on this initial gross margin guide given, one, some of the drivers of the Q4 improvement may not repeat every quarter. And two, we've got some products launching that aren't yet reimbursed, as John mentioned. But when I reflect on the coverage road map that John described, I can certainly see a path to margin outperformance this year.

Okay. On the next slide, this slide gives you that same bridge for revenues. Backing out the 2025 true-ups, you can see that the midpoint of the guide implies roughly 25% growth over what was a monster year for us in 2025. The revenue guide presumes continued growth in women's health volumes and ASPs and another strong year of growth for the organ health products. On Signatera, Steve called out that we are already off to a really strong start so far in 2026.

The guide calls for another excellent year on volume growth, which we are poised to deliver on. On the Q3 call, I noted that we expect another net $50 bump to ASP for Signatera over the near future. Given we are up roughly $20 in ASP for Signatera just in Q4, the guide implies another $30 or so in ASP growth embedded in this initial guide. Of course, that does leave us some upside room as the guys discussed potential for much broader reimbursement that's not embedded in this guide just to start the year, along with our kind of standard operational improvements that we expect to get.

Just a note on the overall pacing of the quarters. We expect Signatera and Prospera to just grow sequentially quarter-over-quarter this year. And for women's health, I think it's worth baking in the usual seasonality that we see where Q1 is a big volume quarter, Q2 is down sequentially, and we recovered to Q1 levels in Q3 and Q4.

Okay. The next slide here is just to give you some insight on the OpEx guide for the year. Overall, at the midpoint, we are slated to grow OpEx about 9.5%, just a bit better than what we previewed on the Q3 call and well below the roughly 25% pro forma growth implied by the revenue guide. The components of the OpEx give some important insight on where we are as a company. After making the investments to get to the right-sized commercial channels, particularly in oncology, we are now in a place where we can drive substantial top line growth while holding SG&A roughly stable in 2026.

Our plan is to stay focused on 2030 and beyond by continuing to invest in best-in-class products and clinical trials. The major components of the growth in R&D include a substantial investment in DEFINE trial for early cancer detection in colorectal cancer and the investments we are making in large clinical trials and technology development focused on MRD. I'll just reiterate once more that we are going to stay in growth mode. And if important new opportunities arise this year, we are not going to be shy about adding some short-term operating expenses to yield long-term results.

And now let me turn it back over to Steve.

Thanks, Mike. In summary, we had a great year across the business. And as you can see on the slide, we have several exciting milestones anticipated as we move through 2026.

Okay. And with that, let me open it up to questions. Operator?

(Operator Instructions)

Catherine Schulte, Baird.

Maybe first, just on Signatera ASPs. On the Medicare side, a few moving pieces there with the ADLT surveillance coming down, but the adjuvant bundle rates going up. Can you just talk through the net ASP impact from those changes and how that factors into your kind of plus 30 annual guide?

Yeah. Thanks, Catherine. Mike, do you want to take that?

Yeah, sure. Thanks, Catherine, for the question. Yes. So the changes on the ADLT rate and on the bundle roughly net each other out, given kind of the mix that we've had in terms of recurrence and bundles over the past year. So the Net 30, what that really -- what that embeds in the guide is us just continuing to execute on broadening the percentage of time we're reimbursed for covered services for Medicare Advantage volumes and more progress in the biomarker states.

It leaves as upside, the additional coverage decisions and all the efforts that we have ongoing with MolDX that John Fesko was talking about on the call. So as I mentioned, I mean, I think the strategy with these initial guides for us over the last 10, 11 years has been to just start with a demanding but achievable kind of initial guide for the year, and that's kind of how I would characterize this ASP guide.

Okay. And then can you give us an update on Signatera mix by indication? If you were to receive a pan-cancer indication on solid tumors for MolDx, I guess, what would that mean for ASPs?

Yeah, I'll take that. So yes, I think we've kind of said before, obviously, CRC, breast, bladder, lung, some of the bigger ones there that we're already covered for making up the majority. But there's a good 30%, maybe 35%, something in that range that fall into kind of the noncovered bucket. That's kind of where we said if we can get coverage for the remaining Medicare indications, it could be based on the run rate, a couple of hundred million dollars in gross profit and revenue.

And we submitted now for a significant number of additional indications that would, I think, capture the vast majority of the remaining outstanding histologies. And we have a good track record of getting Medicare coverage just given the significant amount of data that we've generated. So hopefully, that remains as upside on the ASP, as Mike said.

Puneet Souda, Leerink Partners.

First one, maybe just given the strong growth in Signatera that you're seeing here, despite the seasonality, despite the holidays, you put up a very strong number. Last year, you were talking about sequential 8,000 to 10,000 increases. Mike, maybe for you, how should we think about that number, sequential increase number this year? And on the data catalyst side, maybe could you remind us what's most sort of needle moving this year in terms of the data? And any thoughts on NCCN? And just I have a follow-up on prenatal.

Yeah. So maybe let me comment just for a second on some of the data and then maybe, Mike, you can kind of talk about the pacing. And I don't know, Alex or Solomon, if you guys want to comment on the data. But what we've been focusing on is really generating a lot of evidence in a broader set of indications. And I think you're starting to see a lot of that come out.

So we just had this interventional trial in head and neck cancer, which we think is a great indication. I think there's about 70,000 patients per year there. I think last year, kind of the tail end of the year, we had a gastroesophageal study come out that was pretty significant. We had a pancreatic study come out that was pretty significant. So we're now generating the type of data in these other indications that we think can really move the needle, and I think that, that's exciting.

So Alex or Solomon, do you guys have any other studies that you want to call out specifically before we talk about the pacing?

I think that's pretty good summary. I think, Puneet, if you just look at ASCO GU this year, I was actually at the conference earlier today, a ton of excitement, probably three or four pretty practice-changing studies that we commented on during the pre-read. And I would say pretty much at every other conference later this year, probably five or six major ones, you probably will expect to see a similar drumbeat of clinical readouts. So we're expecting data in breast, additional GI indications, IO monitoring. And then some of the larger prospective randomized studies should start reading out in the next year or two. As we get closer to that, we'll provide some additional guidance.

Yeah. And then just on the -- Yes. Just on the pacing, I mean, I'm kind of in the same place as I have been in terms of the approach. I think the right way to model the growth of the Signatera units is just to take the trailing four quarters average for the sequential growth units. That was 19,500 units, I think, last quarter. And now I think if you do the math, including the Q4 number, I think it gets you to something like 20,000 units. I think that's a decent bar for evaluating Q1.

And then as you continue to grow, the reason why I like that approach is that it does update itself and it kind of gives effect to the compounding effect that we have in the business, given that it's a repeat volumes per patient. And so I think that base expectation will just kind of continue to grow. During the last 4 quarters, average has kind of smooth out any of the just the random (inaudible) you'll have quarter-to-quarter in terms of number of days or whether, holidays or what have you. So I think that's the right approach and it keeps getting higher and the business just keeps on performing better and better.

Okay. That's super. And then a quick follow-up on the fetal-focused product. I just want to understand your marketing approach today and your ability to take share in the market with an existing assay that is more of a single assay. You have two assays here. So maybe just walk us through the patient workup conversation, marketing of this assay? And how do you think about share gain in this? And how should we think about the growth in overall women's health from that share gain this year?

Yeah, I'll take that. I mean I think the real question is really do physicians like the product. And from what we're seeing is there's significant interest in the fetal focus test. I think we're hitting all the right marks. I mean we're seeing the volume really increase. And I think we're in a position to see that continue throughout the year. So from a marketing standpoint, our test works in a very similar way to other single gene tests on the market from the standpoint of how it's ordered or what the flexibility is when you order. So you can decide either to order the test upfront.

Basically, if the mother is positive, then the Fetal Focus test will be run. And I think that's kind of comparable to how others do it. You have to sort of know the mother is positive before you can run the fetal test. And then I think separately, although I don't know exactly how others do it. So I do think separately, the other option is you can order the test, send the blood and then wait and see if the mother is positive and then we can sort of reflex to it.

So there's different approaches, but we offer all the different approaches. And I think it's -- we're flexible from the standpoint of how people want to access the test. But we're seeing a lot of uptick. If you look at the SMFM plenary presentation, certainly, that's a prestigious selection, one that we're excited about. And I think that, that speaks to the strength of the data.

Dan Brennan, TD Cowen.

Maybe just on kind of staying on Signatera. Can you just give a little color as we exited 2025? I know there was a question on pan-cancer, but just walk us through kind of tumor types, kind of what you're seeing as the key drivers. And as we look into '26 for this continued kind of sequential growth in Signatera, like is -- are you seeing any -- obviously, IMvigor is driving bladder, but across the landscape, like kind of what are you seeing and what's baked in? Just want to get a flavor of what's going on in the field?

Yeah. So I guess when you're looking at sort of across different tumor types, there's a lot of different activity across the board. I mean if you just look at all the data that's come out over the last several years, you highlighted IMvigor. I mean, certainly, that's been driving a lot of momentum in bladder. I think this recent data that Alex mentioned at ASCO GU, looking at bladder preservation, I think, is going to generate a lot of excitement.

But it's all the data that we've generated historically now as physicians start to use the product, maybe they use it in one tumor type, they become comfortable with it, they like it, then they see data come out in another tumor type and they start using it in another tumor type or maybe they start within a tumor type using it on one category of patients.

They realize they like the data that's being generated and then they expand within that tumor type to another category. So all of that together, I think, is powering the growth. There's not one -- it's not like there's one factor that's unlocking growth or that is going to really kind of change things. It's a big flywheel effect of having over 100 peer-reviewed papers, having a large commercial team, having a large medical affairs team and being present in many, many offices now seeing more than 50% of doctors ordering the product and then continuing to invest in new clinical trials and rounding out the product portfolio with Signatera genome and Latitude.

Okay. Great. Maybe just on one outside of Signatera, Mike, just in terms of the modeling for 2026 between women's health and transplant, I heard you say something in the prepared remarks about some seasonality in women's health. Can you just give us a bit more of a bridge on those businesses and how we think about whether it be price volume, total revenue, anything to help with the model there?

Yeah, sure. No. So I think that for Prospera for the organ health products, I mean, I think they're going to just continue to grow kind of on a secular growth trend, right? So this was about a 50%-plus grower in '25, and I expect another big year from Organ Health this year. And that's really kind of driven by, I think, just the evolution of that market and the primacy that cell-free DNA is continuing to exhibit in terms of caring for patients.

For women's health, I mean, it's actually -- Steve mentioned, we're off to a great start. Q1 usually is our big quarter. I expect just to continue to grow volumes in the kind of mid-single-digit range for women's health. And I think you can do better than that on revenues because there is, I think, use of squeeze in terms of achieving pricing gains as we've done in the last couple of years. Let me pause there. I don't know, Steve, if you want to compare and contrast, you want to add to that?

No, I think that covers it.

Doug Schenkel, Wolfe Research.

This is a -- I think a follow-up maybe on Catherine's question earlier, and sorry if I just misunderstood the answer. But on Signatera volume and mix, what was the breakdown between exome, genome and Latitude in the fourth quarter? How are you thinking about mix in 2026? And how does that play into kind of upside and downside scenarios for gross margin? And then I guess, sort of related, is it fair to assume that CRC will dip below 50% of total Signatera and Latitude for that matter, volume as indications like breast and lung continue to accelerate and gain further traction this year?

Yeah. Good question. So yes, I'd say on CRC, certainly, we think over time, things will sort of normalize to meet roughly kind of what you would see in the marketplace from the standpoint of cancer prevalence. I mean obviously, breast is going to be the largest over time. And so I think CRC will normalize, but it's still driving a good part of the volume at this point.

But we're already starting to see while CRC is growing and we're maintaining our share there, some of the other tumor types are really starting to accelerate. And I think that's great for us because we've spent the last 8 years generating data in these other tumor categories. And now some of that data like this head and neck data is just coming out now for the first time, and we're in a position to capitalize on that.

When you look at the mix of exome, genome and Latitude, I think the vast majority of volume is exome. We are seeing some interest in genome in certain physician offices and academic centers, and it's great that we can service that, those that are interested in that. We've sort of built in an increase over time there, and that's part of our existing model. And then from a Latitude standpoint, I think the initial kind of idea there was there's a small portion of cases, maybe 5% or something in that range where we're not getting the -- we're not able to get the tissue in CRC. And in those cases, we can now serve those patients for Latitude.

But there's also another opportunity, which is just the sort of physicians who just want tumor naive. And while we think the vast majority of people and what we're seeing is the vast majority of people want tumor informed, there is a subset that want tumor naive, and that's a growth opportunity that we haven't really pursued. And I think that's an opportunity for us as well as we move forward. Hopefully, that gives you a little bit more color.

Casey Woodring, JPMorgan.

Maybe the first one, curious if there's any meaningful contribution from lymphoma or multiple myeloma volumes embedded in the 2026 framework for Signatera? And just more broadly, how should we think about potential upside from heme MRD volumes?

Yeah, it's a great question. So I would say when you look at the model that we just sort of outlined, I would say the contribution is relatively limited. But we think, again, that's a big opportunity for us. If you look at the overall market, now the strength with bringing the Foresight team in and just their experience and the amount of data that they've generated there and the reputation that they have there, I think it's a big opportunity for us. So again, it's sort of conservative in the model. But when you look at the potential for upside there, I think that could really be one of the growth drivers.

Okay. Got it. That's helpful. And then maybe just another one follow-up for me. On Japan, I think you've said in the past you could see approval for Signatera there in '26 with preliminary coverage to set up a launch in '27.

What would this preliminary coverage decision mean for Signatera ASPs and the volume opportunity next year? And curious if coverage would be capped until we see a full readout from CIRCULATE Japan? And then any thoughts on the build-out from a sales force perspective in Japan or lab capacity and what that would mean for OpEx?

Yeah. So I'll make a couple of comments and then maybe John or Solomon, if you guys want to jump in. But we've already built out a reasonable sized sales team there and established a strong distribution partnership. And we're in a position to launch very soon when we get the final approval. From an ASP standpoint, we think the ASP is going to be good if you just look at sort of historical precedent.

And I think we're in a great position. Obviously, we generated some incredible data in Japan. The test is sort of already baked into the guidelines. So I think we're in a great position to generate a lot of volume and revenue as we look into 2027. I think throughout the calendar year '27 and finishing '27, Japan is going to be making a very solid impact on our revenue.

Yeah. Just to build on what Steve said, there's more to similar amount of patients with colorectal cancer in Japan than US despite the smaller population. And when you look at similar molecular genetic products, you see pricing highly similar to the US. We do not need to wait for the end of CIRCULATE to launch or rather the readout you're referencing, and we're in the final stages now with the regulatory authorities there and looking forward to a big launch later this year.

Subbu Nambi, Guggenheim.

This is Ricky on for Subbu. Wondering what you saw with respect to market share changes in the women's health market in 2025? And then what your guidance and some of the volume comments you made for women's health is assuming with respect to further market share gains?

Yeah, it's a great question. So we don't really have data on what everybody else is doing in women's health. But I can say from -- for us, we had a record year. We did very, very well in women's health, and we're off to a great start in Q1. And I think all of that was done really without having the 21-gene Fetal Focus test, which we now have.

And we're seeing that physicians like it, and it's given us an opportunity to go close new customers that previously we haven't had access to. And I think it's a good opportunity for us. So we don't really know exactly about others share, but I can say for us, we're growing our business, and we're seeing record numbers.

Dan Leonard, UBS.

I'm wondering how you're framing the opportunity around higher sensitivity for Signatera. You now have a couple of shots on goal there between Signatera genome, which you haven't talked about in a while and now the Phase variant product as well. So just help me provide some better framing or context around what the opportunity looks like there.

Yeah. So certainly, I think on today's call, we kind of mentioned the phase variant approach getting down below one part per 10 million in LOD studies. And we think that, that is like incredibly strong performance. If you look at, I think, the published analytical validations, I think that, that performs very, very well. The -- what we're doing is we're trying to give the best product possible to physicians and backing that with very strong data.

And so we have the exome MRD test, which works very, very well. We think has shown incredible performance when you look across the studies. And then for those who want a genome-based test, we're making that available as well.

We announced at JPMorgan that we're versioning the genome-based offering, and that's going to now include phased and structural variants, and that's going to be launching soon. So I think we really will have gold-plated MRD offering for those that want that. And then on the other hand, we have a highly published, highly tested, reliable MRD product with significant numbers of outcomes data with the Signatera exome product. And that's setting up like an incredibly competitive positioning for us. And we've also augmented that with the Latitude tumor-naive MRD.

Now of course, there's competition, but we think we're in a good position, and we've put ourselves in a great spot by generating a lot of data and innovating and investing in research and development to continue to lead the pack.

Appreciate all that. And then just on the topic of SG&A, can you help me better understand how you're able to keep SG&A flat in 2026, yet still grow revenue, I think it was at a pro forma clip of 26%. What's making the sales force more efficient?

Mike, do you want to comment on that?

Yeah, sure. I mean I think it's just (inaudible) we wanted to grow our way to the next level (inaudible) then getting closer to profitability, not by making cuts but by making investments and growing the top line. So we did that in spades in '25. We built out the commercial teams really across the board with a particular concentration in oncology. Those teams are ready to go, and they're in position to drive a lot more top line than they have to date just because they've been new and they're kind of -- they're coalescing.

So I think it's a good case study in how we can drive leverage in the business. And -- it's not to say that we won't make -- like I said in the prepared remarks, we won't make opportunistic investments and not to say that things won't come up that we think are worthy uses of capital. But I think it underlines our kind of core strategy over time.

David Westenberg, Piper Sandler.

How should we think about how MolDX is going to think about histology types for Latitude? Basically, what I'm kind of asking here is how can you use your infrastructure and learning to kind of speed that process and coverage? And how is ADLT going to work as you know you have whole genome, Latitude, all those kind of things. Is there a way to tuck it in? Or is it just completely different and there's no possible way? And how should we think about reimbursement period?

Yeah, it's a good question. So we think the -- we're not planning to submit for an ADLT for Latitude just based on the fact that there's other tumor-naive MRD tests on the market and there's other MRD tests. So we don't think tumor-naive are eligible for an ADLT. And I think that we've kind of said that previously without getting FDA approval. But when we look at other tumor-naive MRD products and how they've been priced, we think that, that's sort of well established, and we'll be able to kind of get similar pricing. So we've submitted for CRC. As we launch other products in the future, we're going to generate and publish validation data for those and then submit for those as well.

There's not really -- it's not really a shortcut process. You have to generate the data and publish it and submit it. And luckily for us, we started this back in 2015, trying to generate data. And so we have kind of 10 years now of data that we can rely on. And in some cases, we have biobanks or samples we can go back to and rerun when we're looking at the Latitude product. And I think that's going to help us get moving very quickly.

A quick follow-up for Mike on how you're thinking about the ROI on some of these R&D investments. You mentioned on the call, technology advancement for MRD. Can you kind of just explain what that means? And are there any, in your mind, NCCN generating studies that could be coming out soon in tissue types other than CRC and muscle invasive bladder cancer? Obviously, I don't mean soon like next six months, I got like two years, three years?

Yeah. I mean kind of the basic components of how I think about returns to capital invested on R&D generally, I mean, Signatera is a great case study is just, hey, what is in the TAM? And what is the potential for incremental both volume growth and pricing growth? And the R&D really hits on both of those metrics. I mean, in terms of the volume growth, when you have -- you have a study that's in the New England Journal that's like a landmark study in muscle invasive, bladder cancer that drives a lot of incremental volume. Over time, we hope that it will also kind of drive kind of guideline inclusion.

So the volumes at what is already a high-margin product drive very clear ROICs. And then the data that ultimately gets you into guidelines drives the ASPs much higher than they are right now. So if you just recall, I mean, when we get paid, we get paid something like $3,000 per test. The ASPs as we've been talking about are in that kind of $1,220 range, right? So the delta there is just kind of noncovered tests and the way that you get there is investment in more clinical trials, more evolution of the product.

And you can get really comfortable with the ROICs because you see these volumes, right? Like these volumes are repeat volumes, you get very comfortable that we can have very rapid volume growth. So any investment that drives incremental realized pricing per test, it's easy to see where the ROICs come from there.

Daniel Markowitz, Evercore ISI.

Just one quick one. On the OpEx guide, it's nice to see the operating leverage should really start to turn on in 2026. But it sounds like you're leaving yourselves some freedom to spend more should it make sense and you see an opportunity with the ability to fuel future growth. I guess how do you define the threshold of what makes sense to spend on in excess of the guide? Because I'm sure there's no shortage of opportunities that could fuel future growth.

Yeah. Look, I mean, it comes back to the question that David just asked. I mean it really just comes down to ROICs. I mean, whether that's a small acquisition like what we did with Foresight or internal projects. We take each project with kind of an ROIC framework.

And -- I'm still the newcomer on the management team on the phone here. I mean this is year 11 for me and all these other guys, each one of these guys have been here longer than me. So we've got a very long time together evaluating all of these different opportunities and then trying to just to rank each one and understand there's a risk benefit, there's an execution challenge associated with each one, and we just try to make a right decision kind of based on what the right returns are and what's best for the patients.

And ladies and gentlemen, that's all the time we had today for questions. This does conclude today's conference call. Thank you for your participation, and you may now disconnect.