Natera Reports Q2 2026 Results: Full Earnings Call Transcript

On Thursday, Natera (NASDAQ: NTRA ) discussed second-quarter financial results during its earnings call. The full transcript is provided below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

Access the full call at Summary Natera Inc. reported a record-breaking second quarter in 2026, with approximately 1,044,000 tests processed, leading to a revenue of $753 million, marking a 38% year-over-year growth. Signatera, Natera's MRD test, achieved significant milestones including FDA and Japanese PMDA approvals, contributing to 56% year-over-year growth in clinical MRD volumes. 91 billion, implying a 31% growth, while maintaining operating expenses steady.

Natera highlighted strong performance in women's health and organ health, attributing success to new product launches and strategic investments in R&D and commercial teams. Management expressed confidence in continued momentum, with a focus on further improving ASPs and gross margins, aiming for a long-term gross margin target of over 70%. Full Transcript OPERATOR Hello everyone. Thank you for joining us and welcome to Natera's second quarter 2026 earnings conference call.

After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Michael Brophy, Chief Financial Officer.

Michael, please go ahead. Michael Brophy, Chief Financial Officer Thanks. Good afternoon. Thank you for joining our conference call to discuss the results of our second quarter of 2026.

On the line I'm joined by Steve Chapman, our CEO, Salman Moshkovich, President, Clinical Diagnostics, and Alex Aleshin, General Manager of Oncology, and our Chief Medical Officer. Today's conference call is being broadcast live via webcast. 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 make 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, August 6, 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 Chapman, CEO Great. Thanks, Mike. Let's get to the highlights on the next slide.

We had an exceptional quarter. We processed approximately 1,044,000 tests in the second quarter, once again exceeding 1,000,000 units and setting a new company record with strong volume performance across the business. In oncology, we processed 283,000 clinical MRD units, representing year-over-year growth of approximately 56% compared to Q2 of 2025. Clinical MRD volumes grew 34,000 units over Q1, which is the largest sequential increase to date.

Beyond volume growth, we met several crucial milestones in oncology. Signatera became the first MRD test to get US FDA approval as a companion diagnostic and the first MRD test to get Japanese PMDA approval. In addition, the NCCN Guideline Committee issued a Category 1 recommendation for Signatera-guided adjuvant treatment in muscle invasive bladder cancer. We'll get into all of these topics later on the call.

We generated approximately $753 million in revenue in the quarter, which represents approximately 38% growth over Q2 of last year. Ex revenue true-ups, our revenues grew approximately 40% year on year. Gross margins were strong again at approximately 65%, driven by another quarter of sequential improvement in ASPs. We were also pleased to generate positive cash inflow again this quarter and trim operating losses while continuing to invest in growth initiatives in R&D.

On the guide, we are in a position to completely reset the revenue range, raising it by $100 million at the midpoint. 91 billion in revenues, and we are holding OPEX steady. The guide implies 31% revenue growth this year ex true-ups, and we feel very good about hitting this range. We are clearly on a roll and I'm excited to review the progress since our call in May.

Okay, let's get into some of the business trends on the next slide. I think the growth of total tests over time is remarkable when you look at the longer-term picture here in the chart. In the quarter, Women's Health results were particularly strong on a seasonally adjusted basis with high single-digit growth versus Q2 of last year. Q2 is typically our softest quarter for Women's Health due to seasonality, but we counteracted that effect this year with particularly strong new account wins driven by fetal-focused adoption and early returns on the launch of our newly enhanced Panorama test.

We think this puts us in a strong position to continue executing in Women's Health for the rest of the year. We also had another strong Organ Health quarter as volume continued to ramp. And then of course, we had our best quarter yet for Signatera. The next slide shows our clinical oncology units over time.

As a reminder, that's primarily Signatera clinical units but also includes a small number of Latitude cases. Our sequential growth of 34,000 units was well above our internal expectations, with performance fueled by a few drivers. Let's first look at the change in units between Q1 and Q2. You'll recall that on the Q1 call in May we described weather-related events that suppressed Q1 MRD volumes by several thousand units.

We don't think we necessarily recovered those units in Q2, but the change quarter over quarter is exaggerated by that artificially lower Q1 number. Mike will expand on this as it relates to the guide later in the call. In addition, last year we made a significant investment in the size and the breadth of our commercial team. Most of these folks were hired in the first half of 2025, so we are pleased now to see them hitting their stride.

We also achieved some critical milestones for Signatera, including FDA approval, and we've seen an uptick in general Signatera adoption as a result. We are seeing this in new accounts and new patient starts, which were both very strong again this quarter. This broad-based acceleration is happening across tumor types, with colorectal and breast remaining our largest indications. I am also really encouraged by the contribution from the long tail of indications, both because it demonstrates broad adoption of Signatera in clinical practice and also because it increases the revenue opportunity as we expand coverage to additional tumor types.

At the end of the quarter we got the NCCN guideline in muscle invasive bladder cancer and the PMDA approval in colorectal cancer, both of which we think bodes well in terms of future adoption. So we feel really good about where we are and the ongoing momentum. Moving to revenue on the next slide. Total revenues grew approximately 38% year over year as continued ASP execution accelerated growth on top of the volume performance.

Maintaining this level of top-line growth given the size of our revenue base is pretty remarkable. We had about 52 million in revenue true-ups this quarter, which is trending down in both absolute terms and as a percent of revenue. Ex true-ups, our revenues grew about 40% year on year. We had another good quarter in Women's Health and Organ Health ASPs, and we were pleased to see Signatera ASPs increase again.

Signatera ASPs were up to roughly 1,275, as we continue to drive more consistent reimbursement from Medicare Advantage and commercial plans in biomarker states. We made a significant investment in revenue cycle management a few years ago to get more consistent reimbursement for covered services. While we've completed most of the major initiatives for Women's Health and Organ Health, we still think Signatera ASPs have the potential to grow substantially over time, both from operational initiatives as well as potential additional MolDx coverage decisions and broader guideline inclusion.

We’ve talked in the past about how we think a mature Signatera ASP can reach around 2,000, and we still feel good about that as our long-term target. The next slide shows our gross margin progress across two time periods. The left chart shows reported gross margin versus Q2 of 2025 with solid progress mainly driven by ASP improvements over the past year. On the right-hand side we are zooming in on sequential growth ex true-ups, where we had a roughly 50 basis point improvement over Q1.

This was due to several factors including both ASP wins and returning to a more normalized ratio of reported to accessioned units compared to Q1. COGS increased slightly in Q2 as we saw an uptick in volumes from some of our recently launched products, particularly for Fetal Focus, Latitude, and Signatera Genome. When we launch these products, we leave a lot of room to achieve COGS improvements over time as volumes scale and we're already executing on that roadmap. Latitude and Fetal Focus also present ASP upside over time.

For example, we have a Latitude submission in currently to MolDx. We think we can keep improving margins slightly in the near term despite this new product COGS impact, as we did this quarter. Longer term we feel very comfortable about reaching our target of 70% plus gross margin. The margin improvement going forward is driven mostly by major events like MolDx coverages or the completion of key internal COGS projects.

If you look at our progress on gross margin from the mid-40s to the mid-60s, it wasn't strictly linear. We had periods of incremental progress and also step-function changes, and I think we'll have a similar trajectory in the future. Okay with that, let me turn it over to Solomon to discuss some of the exciting clinical and product developments this quarter. Solomon Thanks, Steve.

I will talk through some of the catalysts that hit in the second quarter, and I want to start in Women's Health with our launch of the enhanced Panorama test, because it addresses something that has been a gap in prenatal screening for a long time: achieving reliable test performance at low fetal fractions during pregnancy. Fetal fraction is the proportion of placental DNA circulating in the mother's blood, and when that fraction is low, detecting chromosomal abnormalities becomes significantly more difficult, with one prior study indicating sensitivity as low as 62% for trisomy 21 using a different technology.

Despite this limitation, most other labs who use a counting-based approach will routinely provide results at low fetal fraction without sufficient clinical performance data to back it up. Historically, Natera would return a no call in such cases about 2% of the time. Our new enhanced Panorama test closes that gap. Powered by our novel SNP-informed deep sequencing technology, Panorama is now the only NIPT with clinical validation data for common trisomies, specifically in low fetal fraction patients.

5%, an improvement of roughly 80% compared to our prior version of the test. The prospective, blinded studies supporting this launch included over 3,300 patients with more than 240 low fetal fraction cases, and we detected 100% of the trisomy 21 cases in that cohort. We launched this in May and the reception among OBGYNs has been very enthusiastic, resulting in many new account wins. This reflects a set of customers who always wanted to order SNP-based testing with Natera but had held back due to the no call rates, which is now resolved.

We think this sets up nicely for volume growth in the back half of the year. This new Panorama also rounds out a multi-year run of innovative launches in prenatal health. Last year we launched Fetal Focus, our next-gen single-gene NIPT to detect inherited conditions like cystic fibrosis, which has continued to exceed our expectations, driven by the strength of the EXPAND trial. And the year before, in 2024 we launched our fetal RHD test, addressing a significant unmet need given the nationwide RhoGam shortage that year.

Amazingly, the demand for RHD testing has continued to steadily increase despite the alleviation of that original shortage. Taken together, these three launches reflect the breadth and consistency of our innovation and growth trajectory in Women's Health. Moving now to Organ Health: the final Medicare LCD for organ transplant surveillance was published in July, and it represents a meaningful expansion over the initial CMS proposal. Now, in year one after surgery, Medicare will cover six tests for patients with kidney transplants and 12 tests for patients with heart and lung transplants.

Then in years two and three, Medicare will cover four tests per year across all three categories, which is significantly higher than their original proposal. This improvement reflects strong advocacy from the clinical community after the draft was originally published by Medicare. In July of 2020, five major transplant medical societies submitted letters to MolDX in support of expanded frequency. This included supportive comments from the American Society of Transplant Surgeons, the American Society of Transplantation, and the International Society of Heart and Lung Transplantation.

We believe their unified voices helped move the needle on this final policy. We have spent years building the clinical evidence base that made this outcome possible, and the August 30th effective date on the policy means we will start to see the benefit of Medicare reimbursement in the second half of the year. We expect this to drive improvements in Prospera ASP and in Prospera volumes as physicians update their surveillance protocols to reflect the new policy. Turning now to Oncology, where we had a great quarter both in terms of commercial adoption and major milestones.

In May, the FDA approved Signatera as a companion diagnostic for patients with muscle-invasive bladder cancer. This is not just a Natera milestone, it's an industry first for the field of MRD testing. Backed by the global phase 3 IMvigor011 trial, it validates the whole tumor concept: treat on MRD at the highest level. Then in June, the Japanese PMDA approved Signatera for patients with colorectal cancer, supported by the GALXC study.

We expect a commercial launch later this year, pending final pricing and reimbursement determination, which is on track. That commercial launch will be supported by society guidelines from JSCO and JSMO. They’re already strongly supportive of MRD assessment in the adjuvant setting. And then in July, Signatera received IVDR certification in the EU, making it the first MRD test for solid tumors to achieve this designation in Europe.

Under this certification, Signatera is indicated across more than 20 tumor types. This streamlines future clinical trial launches across the EU, creating a competitive advantage for us with biopharma while also ensuring continuity of access for patients after the expected IVDD transition deadline in 2028. This also sets Natera up nicely to achieve future reimbursement in Europe, a key part of our long-term global vision. These regulatory wins are the culmination of a long road for Natera in developing our regulatory and quality capabilities, and it's remarkable that these approvals have come in multiple different disease indications at the same time.

These are also major proof points for our biopharma partners. We are building on this momentum with our newest submission to the Japanese PMDA for Signatera as a companion diagnostic in bladder cancer. With this submission we are advancing in lockstep with Chugai, who markets atezolizumab in Japan. Japan reports approximately 34,000 new cases of bladder cancer per year, of which around 20% to 25% will be muscle invasive.

Our submission is supported by data from the IMvigor011 trial, and notably that trial had more than 20 participating clinical sites in Japan, so the leading urologic oncologists in Japan already have experience with the protocol, similar to what we saw with the GALXC trial in CRC.