Thank you for attending the Guardant Health Q4 2025 Earnings Call. My name is Cameron, and I'll be your moderator for today. [Operator Instructions] I would now like to pass the conference over to your host, Zarak Khurshid, VP of Investor Relations. You may proceed.

Thank you. Earlier today, Guardant Health released financial results for the quarter and year ended December 31, 2025. Joining me today from Guardant are Helmy Eltoukhy, Co-CEO; AmirAli Talasaz, Co-CEO; and Mike Bell, Chief Financial Officer. Before we begin, I'd like to remind you that during this call, management will make forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. This call will also include a discussion of non-GAAP financial measures, which are adjusted to exclude certain specified items. Additional information regarding material risks and uncertainties as well as the non-GAAP financial reconciliation to most directly comparable GAAP financial measures are available in the press release Guardant issued today as well as in our 10-K and other filings with the SEC. Guardant disclaims any intention or obligation to update or revise financial projections and forward-looking statements, whether because of new information, future events or otherwise, except as required by law. The information in this conference call is accurate only as of the live broadcast. With that, I would like to turn the call over to Helmy.

Thanks, Zarak. Good afternoon, and thank you for joining our fourth quarter and full year 2025 earnings call. Starting on Slide 3. 2025 was a breakout year for Guardant, where years of investment continues to fuel breakthrough innovation and best-in-class execution across our portfolio. In oncology, we introduced groundbreaking applications for Guardant360 Liquid, upgraded Guardant360 tissue onto our smart platform and expanded Reveal to support therapy monitoring. In screening, we expanded Shield to include a multi-cancer detection results report. At the same time, we made significant progress driving adoption across the portfolio. We have seen exceptional growth in our oncology business, primarily due to the new capabilities and insights enabled by our smart apps that are increasing both the breadth and depth of ordering of Guardant360 more than a decade after its launch. In MRD, we received Medicare coverage for CRC surveillance in early 2025 and growing clinical data generation for Reveal positions us well for additional reimbursement coverage this year. And 2025 represents the first full year for Shield IVD where very meaningful volume and revenue generation exceeds our expectations. We have significantly expanded the commercial team and established impactful strategic partnerships to meet the growing demand for a high-performing blood-based screening option. These advancements reflect our growing execution at scale as we deliver actionable insights to physicians and patients across the care continuum. Importantly, this execution has directly driven strong financial performance, both accelerating our top line growth and strengthening our path to profitability. Now I'd like to share a story that illustrates the real-world impact of our tests. A 60-year-old man had gone his entire life without being screened for colorectal cancer despite repeated recommendations from his physician each year to undergo a colonoscopy. Although he agreed to stool-based testing on several occasions, the kits were never…

Thanks, Helmy. Moving on to Slide 12. Shield has delivered extraordinary growth since launch. We delivered $35 million of Shield testing revenue in Q4, driven by approximately 38,000 tests, which was a meaningful step-up compared to 24,000 tests in Q3. Revenue growth has closely tracked volume growth, reflecting ADLT pricing, favorable collections and a disciplined focus on reimbursable lives. Based on performance to date, we believe Shield is the most successful diagnostic launch in history outside of COVID testing and is positioned to be a significant multiyear growth driver for Guardant. Now turning to Slide 13 to take a closer look at screening highlights for the fourth quarter of 2025. Shield had strong sequential growth in Q4, driven by growing demand from both patients and physicians. Adherence rates remained high, reinforcing the accessibility and convenience of blood-based screening. To support the growing demand, we continue to scale our commercial organization throughout 2025, exiting the year with approximately 300 sales reps. Last month, we received coverage from TRICARE for active duty service members and their families with no co-pay. TRICARE will cover Shield for all eligible average-risk individuals aged 45 and older. In Q4, we launched a dedicated health systems team, and we are excited to report that we have successfully deployed our first enterprise scale integrations with large health systems in West Virginia and Georgia. We are excited by the early progress demonstrating the market demand and our ability to operationalize Shield within complex health systems, including full EMR integration and workflow deployment. Beyond CRC, we are excited to expand Shield to include multi-cancer detection results reported in October. Although still early days, we are encouraged with physicians' enthusiasm to get access to MCD findings and strong interest by patients to be part of the MCD data collection initiative. Turning…

Thanks, AmirAli. Turning to Slide 20. I'll review select financial highlights for the quarter and full year ended December 31, 2025. Unless otherwise noted, all growth rates are year-over-year. Total revenue in the fourth quarter increased 39% to $281.3 million, reflecting strong execution across oncology, biopharma and data and screening. Oncology revenue increased 30% to $189.9 million, driven by continued strong volume growth. We reported approximately 79,000 oncology tests in Q4, up 38%, demonstrating sustained momentum across the portfolio. Guardant360 liquid volumes increased nearly 30%, supported by expanding clinical utility from Smart apps launched over the past year, and Guardant360 tissue remains strong following the major upgrade introduced in Q2. Reveal continued to be our fastest-growing oncology product, benefiting from CRC surveillance reimbursement and ongoing strength in breast and lung cancer. We were also encouraged by the early uptake of Reveal for late-stage therapy response monitoring launched in Q4. Average selling prices were stable sequentially with Guardant360 liquid in the range of $3,000 to $3,100, Guardant360 Tissue approximately $2,000 and Reveal between $600 and $700. As a reminder, we've submitted data packages to MolDx for Medicare reimbursement covering breast MRD and both immunotherapy and chemotherapy response monitoring. Successful outcomes will provide upside to Reveal ASP. Biopharma and data revenue was $54.0 million, up 9%, which was in line with our expectations. Screening revenue totaled $35.1 million from approximately 38,000 Shield tests. Shield ASP was approximately $850, consistent with expectations and reflecting our focus on Medicare covered patients. Out-of-period revenue totaled approximately $18 million for the fourth quarter of 2025, including approximately $3 million related to screening. This was in line with prior periods compared to approximately $17 million in both the third quarter of 2025 and the fourth quarter of 2024. For the full year, total revenue grew 33% to…

[Operator Instructions] The first question comes from the line of Dan Leonard with UBS.

I'd like to talk a little bit about Reveal therapeutic monitoring. Helmy, both you and Mike commented on that in your prepared remarks. Could you elaborate further on how you're framing that opportunity, both for Reveal volumes as well as for Guardant360 volumes as well.

Yes. We're very excited about Reveal for therapy monitoring. We think it's an important opportunity to really solidify and work synergistically with Guardant360. If you think about it, all the volume we have with 360 patients are being tested in terms of therapy selection. And then this idea of coupling that with Reveal for essentially monitoring how those patients are doing on therapy is really exciting. And then the nice thing about that is, unfortunately, as some of those patients progress, they're going to need a new therapeutic decision in terms of hopefully a next-generation drug or a next-line therapy that can be applied to them. And so Reveal for therapy monitoring really bridges to that next Guardant360 test. And we have a very unique platform and portfolio that allows these tests to work together. And so I would say that when we get some of the reimbursement wins for IO monitoring and chemo monitoring, this could be a very important driver for growth over the next few years for the oncology business.

The next question comes from the line of Puneet Souda with Leerink Partners.

The first one, Helmy, for you. When you look at the strong growth that you've seen in oncology, maybe could you elaborate how should we think about that throughout the year and both in G360 versus Reveal? How should we think about the growth of those products? Because important drivers like the camizestrant launch and other things that you mentioned are actually still not in the guide. So just trying to think about sort of how should we think about both of these products volume growth throughout the year.

Yes. Maybe I'll start and I'll let Mike sort of jump in. We're very bullish about '26 in terms of the progress we've made in '25 and what we're seeing at the beginning of the year here. So I would say that we think it's going to be another strong year for 360, something around at least 20% growth in terms of volumes. And then obviously, another very strong year for Reveal. It will continue to be our fastest-growing product. We think we'll see some acceleration, obviously, with Reveal for therapy monitoring as well on top of that. So I think we're well underway for sort of LRP Investor Day projections in 2028.

Yes. Well, maybe just to add because we didn't talk about tissue. I think in the back half of '25, we saw a nice acceleration with Guardant360 tissue following the smart upgrades that we did back in May of last year. And so I think that also as we look forward in 2026, we continue to expect tissue to accelerate. We think there's getting the FDA approval for Guardant360 during the year also could potentially have a pull-through impact on Guardant360 tissue as well. So yes, we're feeling bullish about all of the products across oncology.

The next question comes from the line of Doug Schenkel with Wolfe Research.

Both on Shield and they're related. It's really great to hear that you are expecting to be free cash flow positive in 2026, excluding Shield. I'm curious what you're thinking in terms of Shield specific burn. I think you've provided color on that in the past. And I guess kind of building off of that, I believe you exited 2025 with approximately 300 Shield-focused reps. How should we be thinking about the pacing of rep hiring throughout 2026? And where do you think the sales force should be at year-end?

Do you want to start with that?

Yes. Yes, I can start on the question on -- on screening burn, Doug. Yes. No, for '25, again, our overall burn for the company was $233 million. Of that, roughly around $220 million was screening. We sort of set a target of $220 million. Actually, we pushed quite hard on that, particularly towards the end of the year. We're really wanting to take advantage of our first-mover position. And we mentioned again on the call that excluding screening, the rest of the business was actually cash flow -- free cash flow positive for Q3 and Q4. For '26, we think a similar level of burn on screening as '25. So around that sort of $220 million mark. Again, we're going to be making heavy investments on the commercial side, really building out that infrastructure. And we still expect '26 to be a year of investment for screening and then '27 to be a year of inflection where we start to get a lot of operating leverage on that commercial infrastructure that we build. And maybe just to point out one other thing. Again, we set our full company free cash flow guidance of $185 million to $195 million burn. So that's implying that the rest of the business now is strongly cash flow positive in 2026. And the sort of midpoint of that guide is around $30 million positive cash flow. So yes, we're feeling really good about how we're sort of managing the burn.

In terms of commercial infrastructure and field force, we are very excited with a very powerful commercial platform that we built in 2025. And we are going to continue to build out that commercial organization in 2026. I'm not going to get into the specifics of maybe exact headcount of the field force, but maybe just to give you some direction and color the way that we can think about it, we will continue to invest our incremental gross profit that we are going to generate this year into further build-out of our commercial infrastructure on both sales and marketing and majority would go still in building sales force and hiring more people.

The next question comes from the line of Tycho Peterson with Jefferies.

I want to start off on one of the bigger topics on ADLT pricing. What is your latest thinking? And what have you baked into the guide, if anything, for G360? And then overall, you are guiding for a decel in volumes and revenue in oncology, presumably some conservatism there. There's a lot you didn't bake in, but where do you think kind of the most conservatism is in the outlook on oncology?

Yes. In terms of ADLT, I think we're still on track in terms of FDA submission, making very good progress there. We think that hopefully gets through the finish line in the second half of this year and then potentially sets up second sort of next ADLT pricing rate for 360 at the beginning of '27. So nothing is baked in, in terms of ADLT pricing for 360 for 2026. In terms of the second part of your question, I'll let...

Yes. I mean maybe on the volumes, '25 was an incredibly strong year, particularly with Guardant360 and just with the Smart apps driving the volume. But I think we look at 2026 as just continuing that trend. Our guide is 30% oncology volume growth. And so we think that's incredibly strong. And again, that's coming across all of the portfolio. Helmy mentioned it earlier, but we still expect strong traction with Guardant360, Reveal being the fastest-growing product and tissue continuing to accelerate. So yes, I think we're feeling really positive about the guide that we put out for oncology growth next year -- or this year, should...

Okay, Mike. And then just a follow-up on speak of conservatism, you're also guiding for Shield ASPs to be down relative to where you exited '25. What's the thought process there? And also, what are you baking in for international? I know you flagged that as incremental.

Yes. On Shield ASP, we've seen this trend over the past few quarters. We've really focused on the Medicare population and reimbursable tests. And I think we've done a really great job there. But there is -- we are seeing a lot of demand from the under 65. And so I think our assumption going into '26 is that, that demand will continue to grow and that sort of mix of commercial versus Medicare is just going to increase. So that's really the fundamentals of how we see the ASP moving. we still will maintain the ADLT rate at $14.95. That's now going to be in place for '26 and '27. And we're seeing great reimbursement from Medicare Advantage payers saying that's been leading to some out-of-period true-ups as well. And our ASP for Medicare Advantage is getting stronger and stronger. But yes, it's just really going to be -- it's a mix impact between Medicare and non-Medicare. And on the international side, if the question was focused on Shield, we've seen small contribution from Abu Dhabi in '25. I think we expect, again, the international contribution to be relatively small in '26 and really the driver of the vast majority of the volume and the volume growth is going to come from the U.S. in '26.

The next question comes from the line of Daniel Markowitz with Evercore ISI.

I wanted to ask on Reveal Ultra. It sounds like that's an area where there's a lot of excitement internally. Can you talk a bit about what will be differentiated about the offering, how you see the tumor-informed competitive landscape evolving and when we can expect to see some data or a more substantial update on that asset?

Yes. We're excited about Reveal Ultra, making good progress there. We're on track for launching it this year. And it's something where we believe that the true clinical sensitivity of that test will be best-in-class. I think there's a lot of I would say, contrived messaging in the space in terms of different bars that people are using, but we believe that this will, I think, redefine sensitivity in the tumor-informed space. There are other features of the test. It's going to do more than, I think, other tumor-informed offerings. We always have a special sauce at Guardant with all our tests in terms of when we launch them. And so I think I would just say stay tuned as we share more details later this year about that test.

The next question comes from the line of Andrew Brackmann with William Blair.

AmirAli, you sort of talked about the recent MCED legislation and sort of the longer-term impact there. Can you maybe just sort of broaden out that commentary, talk to us sort of about the importance there for Shield in particular? And as you sort of think about the necessary steps for Guardant to sort of take advantage of that, can you just remind us on sort of the data generation and sort of path to FDA approval here?

Yes. So I think we're talking about this MCED deal that just passed. So we are -- as I mentioned in the prepared remarks, we are encouraged to see the passage of the legislation. It's moving the whole field forward, but it's not going to be a meaningful driver of our business based on the business plan that we have in near term. Again, it's good for the field. Maybe as we go through midterm and talking about more than triannual testing with Shield, maybe there would be opportunities enable with this MCED deal for us. But again, in near term, we don't look at it as a meaningful driver of our business.

The next question comes from the line of Subbu Nambi with Guggenheim.

A follow-up to Andrew's question, AmirAli. What has the opt-in rate for MCED Shield been so far? And if you were to accumulate significant data by year-end, would you be able to submit something to the FDA for RSE approval? I know it doesn't matter to the core story, but just trying to figure out as we think about upside.

Yes. Thanks for this important question. When we are thinking about the data that now we are generating with this MCD offering for Shield when the physician and patients are opting in. On one side, we are really encouraged by the enthusiasm that we are seeing on the provider side and participation by patients to opt in to release their medical record to us. On the other side, on the data side, I think in hopefully, in near future, we would be the company that has access to the widest, broadest clinical data in terms of clinical utility of MCD testing in U.S. patient population. So we are seeing good adoption rate. I don't want to get to the exact number of it. It's trending up, but so far, so good. So far, so good, and we are very excited with it.

The next question comes from the line of Michael Ryskin with Bank of America.

This is Aaron on for Mike. Can you talk a little bit more about the puts and takes of the Shield guide? Obviously, 4Q saw the 14,000 sequential volume growth. But should we thinking about that as more of an anomaly and just kind of thinking about how much conservatism is embedded within the guide? And I guess the second part of that is thinking about Quest and PathGroup, those look like upsides to the guidance. And so how should we be thinking about the timing of those impacts of those tailwinds as we head through the year?

Yes, sure. Look, obviously, we are very excited with this guide of like 87,000 volume going to midpoint of 217,000 and a very huge revenue growth and contribution. On the other side, when we are thinking about the guide, we are, again, just in the -- still very early inning of this launch. This is just the second year of launch, and we want to be thoughtful with our guidance. We typically don't want to get too excited and get ahead of our skis just based on 1 quarter performance. But the trends are very positive. We are, again, very excited of how 2026 is going to shape out for us. In the prepared remarks, we talked about some of the 1Q seasonality in PCP offices is kind of normal. for us, again, in terms of year-over-year growth for us, I think we are very excited with the guide that we put out there. And there are some upside. We'll see like we are very optimistic about ACS guideline, and we believe it should be near. It's not part of our guide right now until they update their guideline. Quest, PathGroup, very minor contribution. We are counting on some benefit of the EMR connectivity enabled through this Quest and PathGroup integration, but we are not counting any kind of contribution in terms of the volume contribution of the co-promotion and volume that comes from Quest salespeople. We are going to monitor it. It should be positive, but since we don't know exactly how positive it would be, we want to monitor for the first few months of the launch and see how it goes. And then if appropriate, we would adjust our guidance accordingly. But we just want to be thoughtful about that matter as well.

The next question comes from the line of Mark Massaro with BTIG.

I wanted to also ask about Shield. So for AmirAli, one of the success stories of -- one of the drivers of the success of Cologuard was their direct-to-consumer TV launch. How are you thinking about spending in 2026? Is it more Select digital? Or do you anticipate some spend on TV? And then I also wanted to ask about Quest. There is access for the, I believe, the Quest salespeople to promote Shield. I just want to double check that these reps are incentivized. And then can you just maybe give us a sense for where the Shield test might sit in their bag relative to the other products they're selling?

Yes. So some DTC pilot has actually happened for us in 2025 in select markets. And in 2026, we are excited that hopefully, consumers and even physicians would see even more of that. So we have some active campaigns that they are about to get finalized, and we are excited to put it out there and see what the impact would be. So we are very excited about it. The rest, stay tuned after we launch it in very near future. In terms of Quest, yes, actually, the salespeople are incentivized. It's part of their commission plan. And what we do know is actually it was very important and interesting for the Quest management team to get access to Shield as a very differentiated brand that gives them opportunity to talk about something new and something exciting with the accounts. So again, we are going to monitor how the launch goes with Quest in terms of co-promotion part of it. It should be again positive, but we'll see how positive it would be.

The next question comes from the line of Kyle Mikson with Canaccord.

On the MetaSight acquisition, interesting to see that. Most of the consideration is tied to future commercial performance and the regulatory approval of the technology. So first one, wondering what the path is to noncancer launch is? And then second, it seems like they use mass spec, how does that factor into your NGS heavy platform?

Yes. So we are very actually excited about this acquisition to bring a very high-quality world experts on some specific complementary technologies to our Smart Platform. So we are very excited to go to work and see what we can do. It's a small technology talking again. So let us make more progress, and we will talk about it at the right time.

The next question comes from the line of Casey Woodring with JPMorgan.

Just a couple more on Shield maybe. So you mentioned that the guide is back half weighted. What does that guide imply for Shield in 1Q? I think that, that comment would imply a sizable step down sequentially. And then I guess, on the ACS commentary you made, if that hits in the first half of 2026, can you help us think about the upside to volumes in the back half of the year and what that could look like?

Yes. Maybe I'll start with the ACS part. Let us actually see when it would happen. It should be in the near future. But I think when you think about there are about a dozen states that they have state-level mandates that even younger patient population should get access to the test. And the whole screening market is maybe about 40% this 65 year and above and more are, in fact, on the younger patient side. That could be an interesting upside and growth driver for us once we start really going much deeper on the commercial testing within those states. But let's first see actually when they update their guideline, and we go from there. In terms of Q1, yes, that's true that there is some Q1 seasonality in PCP offices, which in terms of screening and so forth. But our team has done a very good job to reschedule appointments that have been kind of impacted or the events that have been impacted. And we are on track to screen more patients in Q1 than in any other previous quarters. post launch. So let's see how the rest of the quarter goes, but -- and we will talk about this in our next earnings call.

The next question comes from the line of Dan Arias with Stifel.

This is Paul on for Dan. I guess I just want to follow up on Subbu's question about kind of regulatory strategy for multi-cancer Shield. One of your competitors had some data out this afternoon with not meeting the primary endpoint with a very, very large MCED trial in terms of looking for stage shift. And then one other piece was this week in the New England Journal, there was some FDA willingness to be a little more flexible on what evidence generation might look like. I'm just wondering if any of these developments kind of influence what you would look to do for your evidence generation strategy and for your regulatory strategy with Shield MCD?

Actually, this news just came out. So I don't know all the details of it. We've been on this call with you guys. But I think when I think about it, really, what is important in the field of multi-cancer detection is the performance of detecting early stages. And we believe with the technology that we have for Shield, the performance of early-stage detection as it's shown in CRC could be very interesting, and that could have a meaningful impact. On the other side, I think it really highlights what we are doing to capture all the clinical evidence, medical record of the patients who are going through MCD testing in U.S. and really establish the utility of this MCD testing at very large scale. We are going to benefit from this commercial scale of Shield, and we can put that evidence together in a very OpEx friendly and in a very quick way. So I think it's kind of -- we are getting more bullish with the pathway that we went after screening business and what we are doing with our MCED offering.

The next question comes from the line of Luke Sergott with Barclays.

So on the Shield demand and after you guys have had this for 1.5 years now, but this is like the first full year of launch has been great. You're going to trend even further for next year. Can you kind of give us a sense of where the demand is coming from? Like how much of this is from the care gap closure versus winning share from colonoscopy or FIT or Cologuard or any of the other tests?

Yes. So demand is coming from PCP physician in terms of patient type. Still, we are really focused on unscreened patient population. I think some of the latest data that I've seen about still 90% of the patients who are getting screened by Shield have not been screened before, at least during the last 5 years. when we got access to their medical record and claims. So really, our messaging is working, and we are increasing the rate of overall screening. Care gap and those kind of opportunities still is ahead of us. We need to get into -- we need to qualify for quality scores and Shield still is not. Once we get to the HEDIS, that would be a huge additional growth driver for us. So care gap program is not part of our growth right now.

The next question comes from the line of Jack Meehan with Nephron Research.

Appreciate all the color on the screening investments you're making. I was wondering if you could share color on the oncology side, specifically, just the mark-to-market, how large the sales force is there now and planned investments? And then second, you've talked about the NovaSeq X transition. When in the year is that taking place? And any way you can quantify level of savings you expect?

Yes. So I think obviously, as Mike said, we reached cash flow positivity on the oncology side last year. And obviously, we'll be generating cash this year. We're in a really good spot in terms of where we are with oncology. We've been essentially reinvesting in the business as a matter of course, as we see opportunities for growth on the sales side, as we see revenue per rep sort of grow, we saw tooth around a healthy number in terms of a matter of course, expansion of the team. And so we're in a healthy spot, and we'll continue to sort of invest where we see return on investment in terms of potential volume growth. In terms of the NovaSeq transition, maybe I'll let Mike take that one.

Yes. We -- I mean, first of all, we successfully transitioned Reveal over to NovaSeq X just over a year ago as well as workflow efficiencies. We saw a nice reduction in the cost per test for Reveal. And with Guardant360, we started that transition. It will take time to fully be implemented. probably around about the middle of the year, I would expect all Guardant360 liquid tests to be on NovaSeq X. And yes, we expect to see a nice improvement in our cost per test. I think just put in to quantify it a little bit, our gross margin currently for Guardant360 is in the high 60s. And probably once we've gone through the full move to NovaSeq X and things are working properly, I expect to see maybe 200 basis point improvement and sort of pushing that Guardant360 gross margins into the low 70% level. So yes, no, we're feeling very positive about the switch, and it's going to have a nice impact on our P&L.

Operator, one more question please.

Our last question comes from the line of Bill Bonello with Craig-Hallum.

So this one, I guess, is probably for Helmy. I think the -- if I understand it right, that the FDA approval would open the door to physicians being able to order both tissue and blood from Guardant concurrently. I'm just curious what your sense of is for the appetite for using both tests upfront and then also touch on maybe any reimbursement challenges that you might anticipate if that becomes more common.

Yes. As you know, guidelines, I think, are increasingly recommending that for patients upfront, especially in lung cancer and breast cancer, which are some of our 2 largest indications for 360. And one of the challenges is the way that LDT is reimbursed, it really is not possible to order them concurrently. And so that's obviously been a little bit of a headwind that sort of will become a tailwind once we get FDA approval for Guardant360. So we do see that as a potential driver. Obviously, we want to make sure it's done in the cases where it's -- there's clinical utility for the patients and value for treatment selection. But we're very confident that I think will be, I think, important catalyst for our tissue business going forward.

Due to the interest of time, that was our last question. That will conclude today's call. Thank you for your participation, and enjoy the rest of your day.