Natera (NASDAQ:NTRA) reported fourth-quarter 2025 results that management characterized as a record period for testing volume, revenue, and gross margin, while also initiating 2026 financial guidance and highlighting multiple clinical and product milestones across its oncology, women’s health, and organ health portfolios.
Fourth-quarter volume and revenue outperformance
Chief Executive Officer Steve Chapman said the company processed about 924,000 tests in the quarter, including a record 225,000 MRD clinical units. Management said MRD clinical units grew about 56% versus the fourth quarter of 2024, and Chapman estimated that more than 50% of U.S. oncologists ordered a Signatera test during the quarter.
The company reported about $60 million in revenue true-ups in Q4, consistent with the pre-announcement, as cash collections accelerated. Chapman said Natera posted a record 47 days sales outstanding (DSOs), improving from 68 days in Q4 2024.
Gross margin expansion and profitability commentary
Chapman said Natera delivered a 66.9% gross margin in Q4, which management noted was not included in the January pre-announcement and came in “well ahead” of expectations. He added that approximately 3% of the reported gross margin benefited from revenue true-ups; excluding true-ups, the company posted an organic gross margin of 63.7%.
CFO Michael Brophy said the quarter also benefited from some factors that may not repeat each period, including a “nice high margin contribution” from pharma and a higher-than-usual ratio of reported units to tests in process, which can lift margin because revenue is recognized when tests are fully reported.
Brophy said operating losses narrowed versus the prior year, and that the company generated net income in Q4, helped by a one-time “below-the-line deferred tax item” related to the Foresight Diagnostics acquisition. He added that the balance sheet remained “pristine,” with over $1 billion in cash and securities.
Chapman said Natera generated over $107 million in cash flow in 2025 while continuing to invest in growth initiatives.
2026 guidance: revenue growth, margin outlook, and expense discipline
Natera initiated 2026 guidance calling for $2.62 billion to $2.7 billion in revenue and 63% to 65% gross margin. Brophy said the guidance does not assume any “meaningful contribution” from revenue true-ups, and he expects true-ups as a percentage of revenue to decline as revenue cycle management improvements mature.
On margins, Brophy said gross margin in 2025 excluding true-ups was about 61.5%, and that the 2026 midpoint implies continued cost of goods (COGS) improvements and additional ASP gains. He also said the company is being cautious in its initial gross margin guide because some Q4 drivers may not recur and because some newly launching products are not yet reimbursed.
On pricing, Brophy said the Medicare ADLT surveillance rate changes and bundle rate changes “roughly net each other out” based on mix. He said the embedded Signatera ASP improvement in guidance reflects execution on improving reimbursement for covered services (including Medicare Advantage) and progress with commercial payers, while leaving potential upside from additional coverage decisions and MolDX efforts outside the initial guide.
The company guided to operating expense growth of about 9.5% at the midpoint, which Brophy said is well below the revenue growth implied by the guide. He said Natera expects to hold SG&A roughly stable after building out commercial teams in 2025, while making targeted increases in R&D. Brophy cited a “substantial investment” in the DEFINE trial for early colorectal cancer detection and continued investments in MRD clinical trials and technology development.
On quarterly cadence, Brophy said Signatera and Prospera are expected to grow sequentially through 2026, while Women’s Health is expected to follow typical seasonality: Q1 up, Q2 down, and a recovery in Q3 and Q4.
Clinical and product updates across franchises
Women’s Health: President of Clinical Diagnostics Solomon Moshkevich highlighted the launch of the expanded 21-gene Fetal Focus single-gene NIPT, which uses Natera’s LinkedSNP technology to assess fetal risk when the mother is a carrier of a recessive mutation and the father is unavailable for screening. He said the offering can be ordered upfront with Horizon or after Horizon results are known. Management reported 96% overall sensitivity across conditions and 98% population-weighted specificity, and said the prospective blinded validation from the EXPAND trial was selected for an oral plenary presentation at the Society for Maternal-Fetal Medicine meeting. Chapman said early uptake is increasing and the company is seeing growth in new OBGYN and maternal-fetal medicine accounts.
Organ Health: Moshkevich said Natera completed enrollment in the randomized ACES-EMB trial in heart transplant, which compares Prospera surveillance to protocol endomyocardial biopsies. The study enrolled over 300 patients across 17 U.S. transplant centers and will follow patients for 12 months, with a planned results readout in mid-2027. He also cited a prospective study published in Transplantation Direct from Ohio State University that incorporated Prospera into lung transplant monitoring, where clinicians forewent the nine-month surveillance biopsy in about 75% of patients with low-risk Prospera results, with no significant differences over the following three months in acute rejection rates, lung function metrics, or immunologic markers compared to those who had biopsy.
Oncology/MRD: General Manager of Oncology Alexey Aleshin previewed multiple abstracts and presentations at ASCO GU focused on bladder cancer, including data from studies such as INDIBLADE and RETAIN that he said suggest ctDNA-negative patients on active surveillance can have similar outcomes to ctDNA-negative patients who undergo cystectomy, supporting potential bladder-sparing approaches in appropriate patients. Aleshin also discussed interventional data from the phase II SINERGY trial in recurrent or metastatic head and neck squamous cell carcinoma, describing ctDNA-guided escalation/de-escalation with pembrolizumab with or without chemotherapy. He said 74% of patients de-escalated chemotherapy at least once, with a median of two cycles delivered versus a typical six, and reported an objective response rate of 63% with 48% Grade 3 or higher toxicity, comparing those figures to historical precedents. He added that this head and neck indication is already covered by MolDX under an IO treatment response monitoring indication.
Latitude and reimbursement progress: Chief Business Officer John Fesko said Natera submitted its first tissue-free MRD assay, Latitude, to MolDX in colorectal cancer. He described Latitude as a methylation-based assay intended to complement Signatera when tumor tissue is unavailable or delayed. Fesko cited validation results from the GALAXY study published in npj Precision Oncology, including hazard ratios of 10 post-surgery and 31.9 in surveillance, 84% longitudinal sensitivity, 97% sample-level specificity, and a 4.6-month median lead time ahead of imaging. He said the submission is a step toward broader reimbursement and scaled adoption in colorectal cancer, and that the company plans to validate tissue-free technology in other cancers later in the year.
Phased variant technology: Fesko said Natera integrated phased variants into its tumor-informed Signatera platform following the December acquisition of Foresight Diagnostics. He said phased variants can lower detection thresholds “below one fragment” in a background of 10 million normal copies, citing an LOD 95 of approximately three parts per 10 million and detection below one part per 10 million. Fesko said the approach is available today for research use and will be launched clinically in 2026, and that it is generating interest with pharma partners, including a prospective pivotal trial the company expects to announce when it begins.
Key Q&A themes: coverage upside, mix, and international opportunity
- Non-covered testing and coverage upside: Chapman said roughly 30% to 35% of Signatera volume falls into non-covered indications, and that expanded Medicare coverage could represent “based on the run rate” about $200 million in revenue and gross profit opportunity. He said additional indications have been submitted to capture most remaining histologies.
- Test mix: Chapman said the vast majority of MRD volume is Signatera Exome, with some interest in Genome at certain offices and academic centers. He said Latitude initially targets cases where tissue is not available (he characterized this as a small portion of colorectal cancer cases) and may also address a subset of physicians seeking tumor-naïve MRD.
- Heme MRD: Chapman said lymphoma and multiple myeloma contributions are limited in the current model, but described heme MRD as a significant upside opportunity, particularly with the addition of the Foresight team.
- Japan: Management said it has built a sales team and a distribution partnership in Japan and is in late-stage regulatory discussions, expecting a “big launch” later in 2026 with an anticipated revenue impact building through 2027. The company noted colorectal cancer patient volume in Japan is comparable to the U.S. and said pricing for similar molecular diagnostics has been “highly similar” to U.S. levels.
Management closed the call reiterating that it plans to continue investing in product development and clinical studies while pursuing operating leverage, with Chapman describing 2025 as a “transformative year financially” and Brophy emphasizing a return-on-invested-capital framework for incremental spending decisions.
About Natera (NASDAQ:NTRA)
Natera is a global diagnostics company that develops and commercializes cell-free DNA and other genetic testing technologies for clinical applications. The company focuses on three principal areas: reproductive health (including non-invasive prenatal testing and carrier screening), oncology (tumor-informed assays for minimal residual disease and recurrence monitoring), and organ transplantation (cell-free DNA tests to detect allograft injury). Natera combines laboratory testing, proprietary bioinformatics, and clinical reporting to deliver personalized genetic information to clinicians and patients.
Key product offerings include Panorama, a non-invasive prenatal test that screens for fetal chromosomal abnormalities and select single-gene conditions; Horizon carrier screening for inherited conditions; Signatera, a personalized, tumor-informed assay used for detecting minimal residual disease and monitoring treatment response in cancer patients; and Prospera, a donor-derived cell-free DNA test used to assess the risk of organ rejection.
