GH - NASDAQ

Good afternoon, and thank you for attending the Guardant Health Q2 2025 Earnings Conference Call. My name is Jason, and I'll be the moderator today. [Operator Instructions] I would now like to pass the conference over to your host,

Thank you. Earlier today, Guardant Health released financial results for the quarter ended June 30, 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 live call over to Helmy.

Thanks,

Thanks, Helmy. Moving on to Slide 16. We delivered $15 million of Shield testing revenue in Q2 driven by approximately 16,000 tests. We are pleased to see continued strong traction for Shield in the third full quarter of commercial launch. Shield continues to generate strong enthusiasm from both patients and physicians with high adherence rates that continue to be over 90%, meaning we received blood samples for more than 90% of ordered cases. This demonstrates the simplicity of Shield as a routine blood test for CRC screening that can be implemented into standard PCP care. We also continue to observe strong depth of ordering per physician. Moreover, we've been encouraged with the momentum in sales rep productivity in the field, although it's still early days in our commercial journey and the average tenure of our sales reps is less than 8 months. Given our performance this quarter across revenue, volume and gross margin, we are further accelerating the build-out of our commercial infrastructure and now expect to surpass 250 sales reps by year-end to support this growth as we go to 2026. Moving on to Slide 17. In late May, we are very encouraged to see National Comprehensive Cancer Network, or NCCN, update its CRC screening guidelines to include Shield. The new NCCN guidelines place Shield in Category 2A, which is the same category recommendation as the other first-line screening modalities. This represents the first national guideline recommendation for Shield and, in our view, paves the way for improved commercial coverage and patient access. This also supports our confidence that Shield will be included in other national CRC screening guidelines in the future. Now turning to Slide 18 to take a closer look at screening highlights for the second quarter 2025. Starting with Shield CRC. As I mentioned earlier, we are very pleased with the high patient adherence, strong depth of ordering per physician and the productivity of our reps in the field. We are also very excited to see Shield is now a guideline-recommended screening test by the NCCN. Along with this strong momentum, Shield was recently named a winner of Fast Company's 2025 World Changing Idea Awards, an award that recognizes innovative companies and projects addressing the world's most urgent challenges. Beyond CRC, we made meaningful progress with Shield multi-cancer detection, MCD, in the second quarter. As a reminder, we presented the clinical validation of Shield MCD test at AACR and ASCO this year. This momentum continued when Shield MCD received breakthrough device designation from the FDA, making an important milestone for us. Moving on to Slide 21. As a reminder, our goal has always been to detect cancer early when it's most treatable. We developed our Shield assay as a platform capable of multi-cancer detection, with CRC screening representing just the first indication for Shield given it has an established regulatory and reimbursement pathway. While we are encouraged by the strong traction we are seeing for Shield CRC, we are even more excited about broadening the impact of Shield across multiple cancer types. Moving on to Slide 22. In early January, we announced Shield's selection for inclusion in the National Cancer Institute's Vanguard study, which is a 24,000-patient pilot study to evaluate the use of MCD tests. As a reminder, Shield was 1 of only 2 technologies selected through a highly competitive process. We are pleased to share the commencement of NCI Vanguard study just a few weeks ago, and we have already started delivering MCD results to physicians and their patients through this trial. The initiation of this study establishes the clinical and operational readiness for Shield MCD and marks an important milestone for the Shield platform. We are looking forward to broadening access to Shield MCD beyond the scope of the Vanguard study in the near future. Looking ahead, Shield V2 continues to be a very active program for us, and we remain confident about the potential inclusion of Shield in American Cancer Society or ACS guidelines. With that, I will now turn the call over to Mike for more detail on our financials.

Thanks, AmirAli. Turning to Slide 23. I'll now discuss some select financial highlights for the quarter ended June 30, 2025. I'll refer to year-over-year growth rates unless otherwise noted. Second quarter total revenue grew 31% to $232.1 million, driven by strong performance across all our key revenue lines, oncology, biopharma and data and screening. Starting with our oncology business. Oncology revenue grew 22% to $158.7 million primarily driven by another quarter of accelerated volume growth. As a reminder, oncology volume consists of our Guardant360 Liquid and Tissue therapy selection tests and our Reveal and Response monitoring tests. Oncology volume grew 30% to approximately 64,000 tests in Q2, with the majority of growth driven by Guardant360 Liquid, closely followed by a strong contribution from Reveal. Guardant360 Liquid year-over-year volume growth accelerated for the fourth consecutive quarter and was over 20% in Q2. Reveal year-over-year volume growth also accelerated in Q2 and continues to be our fastest-growing oncology product. We also continue to see strong oncology ASPs in Q2. Guardant360 Liquid ASP was in the range of $3,000 to $3,100 in the second quarter of 2025, in line with the prior quarter. Guardant360 Tissue ASP increased to approximately $2,000 in Q2, which means that we have reached our 2028 Tissue ASP target 3 years ahead of schedule. This has been driven by the increase in Medicare pricing from $3,140 to $3,500 at the start of the year, good progress with commercial payers and incremental reimbursement related to the recently launched tissue RNA feature. We've been very encouraged by the attachment of RNA to our Guardant360 Tissue test, and we want to highlight that we do not count tissue RNA separately from Guardant360 Tissue in our reported volumes. Reveal ASP continues to be in the range of $600 to $700 following Medicare CRC surveillance coverage earlier in the year. Out-of- period revenue was consistent with normal expected levels in Q2 and did not provide a material upside in the quarter. Finally, note that we do not include Guardant Hereditary Cancer testing or IHC volumes in our reported volumes, and we expect minimal revenue contribution from these new offerings throughout 2025. Our biopharma and data business performed incredibly well again in the second quarter with record revenue totaling $56 million, an increase of 28%. Our biopharma pipeline continues to shape up solidly, driven by Guardant Infinity and additional companion diagnostic partnerships signed in the quarter, all of which add to our confidence in both the short-term and long-term business. Finally, we continue to see increasing revenue contribution from Shield with screening revenue totaling $14.8 million in Q2 generated from the 16,000 Shield tests that we reported in the quarter. Turning to Slide 24. We're extremely pleased to report that we are making great progress with Shield non-GAAP gross margin, which increased to 48% in Q2 compared to 18% in Q1 2025 and 2% in Q4 2024. This was driven by continued improvements in both ASP and COGS. Shield ASP was over $900 in Q2, which represents a significant increase over the ASP of approximately $600 in Q1. The main drivers of ASP improvement were the increase to our Medicare rate from $920 to $1,495 following the receipt of ADLT status, which became effective on April 1, and the continued high mix of reimbursable test volume. It should also be noted that the Shield ASP reflects the strong reimbursement that we are receiving from Medicare Advantage payers. Equally pleasing is that Shield non-GAAP cost per test further reduced in Q2 and is now less than $500. This continued improvement is driven by increased Shield volume and the excellent performance of our operations team in maintaining rigorous cost controls and driving efficiency gains. Similar to last quarter, we plan to reinvest the incremental Shield gross profit we generate back into the sales and marketing line to accelerate the screening commercial infrastructure build-out. We continue to be very proud of the financial profile that Shield has demonstrated in such a short period of time. Turning to Slide 25. Our non-GAAP gross profit was $153.8 million, an increase of $47 million or 44% year-over-year. Our non- GAAP gross margin of 66% was above our expectations in the second quarter of 2025 and was a significant improvement compared to 60% in the second quarter of '24. The improvement in gross margin is primarily a result of improved oncology ASPs as well as a significant turnaround in gross margins for Reveal and Shield, which were both gross margin negative in Q2 2024 and which are now both gross margin positive. As we noted last quarter, Reveal cost per test has reduced from over $1,000 in 2024 to less than $500 in 2025. Non-GAAP operating expenses were $215.3 million in the second quarter of 2025, an increase of 20% and in line with our expectations. Both non-GAAP R&D and G&A expenses in the quarter were approximately flat compared to prior year, which reflects the operating leverage that we're achieving throughout the business. Non-GAAP sales and marketing expense increased 45% to $107.8 million in the second quarter of 2025. This increase was due to the ongoing screening commercial build-out as well as continued investment in oncology sales and marketing. Adjusted EBITDA loss was $51.9 million for Q2 2025, an improvement of $10 million compared to a loss of $61.9 million in Q2 2024. We continue to be focused on cash management and reducing our burn in 2025 versus 2024. Q2 2025 free cash flow burn was $65.9 million compared to $99.1 million in the prior year period. We ended the quarter with approximately $735 million in cash, cash equivalents and restricted cash. Moving to Slide 26 for our outlook and assumptions for the full year 2025. We're increasing our full year 2025 revenue guidance for the second time this year to be in the range of $915 million to $925 million, representing growth of approximately 24% to 25% compared to 2024 and an increase of $35 million compared to our prior range of $880 million to $890 million. We now expect oncology revenue to grow approximately 20% year-over-year in 2025 compared to our prior guidance of 18%. The increase is based on stronger-than-expected Guardant360 Liquid and Reveal volumes in Q2 2025 as well as higher oncology volume now projected for the remainder of the year. For the full year 2025, we now expect total oncology volume to grow greater than 27% versus our prior expectation of greater than 25%. We continue to expect our biopharma and data business to perform well throughout 2025 and now expect mid-teens revenue growth compared to our prior expectation of low double-digit growth. We're also raising our full year 2025 Shield revenue guidance again this quarter to $55 million to $60 million from our prior guidance of $40 million to $45 million. This increase is largely driven by higher volume where we now expect 68,000 to 73,000 tests versus our prior guidance of 52,000 to 58,000 tests. Our Shield revenue guidance assumes an ASP of approximately $800 for the second half of 2025, slightly lower than our Q2 ASP as we anticipate potential changes to the mix of Medicare and commercial pay tests as we scale the business. With the significant improvements to gross margins that we've generated during the first half of the year, we are raising our full year non-GAAP gross margin guidance to be in the range of 63% to 64% compared to the previous range of 62% to 63%. As we've previously outlined, we plan to reinvest any incremental screening gross profit we generate throughout the year back into the business to accelerate our commercial infrastructure build-out. As a result of improved Shield volume and gross margin, we're increasing our sales and marketing efforts and now expect 2025 non-GAAP operating expenses to be in the range of $840 million to $850 million, representing an 11% to 12% increase compared to 2024. We continue to expect full year non-GAAP R&D and G&A expenses to be relatively flat compared to 2024. Lastly, our commitment to cash burn reduction each year in order to reach company-wide cash flow breakeven in 2028 is unchanged. For full year 2025, we still expect free cash flow burn to be in the range of $225 million to $235 million, an improvement compared to $275 million for 2024. We continue to expect our cash burn in 2025 to consist of approximately $200 million related to screening as we scale our Shield business and maximize our first-mover advantage. Significantly, excluding screening, we continue to expect the remainder of the business to burn approximately $25 million to $35 million during the year and to reach free cash flow breakeven in the fourth quarter of 2025. Moving on to Slide 27. At the start of the year, we outlined an ambitious pipeline of catalysts, and it's a testament to our team's strong execution that we've delivered on nearly all of them just halfway through the year. And finally, turning to Slide 28. We'll be hosting an Investor Day on Wednesday, September 24, in New York City. We look forward to sharing a deeper dive across our business. Please reach out to [email protected] for more information. With that, we'll now open the call to questions.

[Operator Instructions] Our first question is from Mark Massaro from BTIG.

Congratulations on the strong beat and raise. Helmy, the first one is for you. Clearly, you guys are doing a really great job in G360 Liquid and you've raised the volume guidance for the year. You talked about SERENA-6. And what I'm curious about is, did you see any benefit from the New England Journal publication perhaps in Q2? And can you give us a sense for the likelihood that you can continue to drive the interval of testing in 360 in breast cancer?

Yes. No, thanks for the question. We're happy with the quarter, obviously, and happy with the performance of our core business. I think as we've said, this quarter, we saw something like over 20% growth for G360, which is just fantastic to see this kind of growth, a product that's been in the market for so long. And I think what we're seeing right now is really, I think, a testament to the product market fit we've achieved with our Infinity Smart Liquid Biopsy platform. And I think there's a lot more juice to squeeze. If there was SERENA-6 impact, it was very minimal. This quarter, we think we'd see the majority of that once and if the drug is finally approved. And we obviously are very excited about that in terms of the potential for adding significantly more testing opportunities to the liquid biopsy space. But I think this is really, I think, shows kind of how big the CGP liquid biopsy market is. I think we're still in the early innings of converting users to essentially just one test to the first test from a liquid biopsy space. But we have so much room to run, I think, so many years of growth ahead of us as we start getting this sort of monitoring paradigm really kind of fully realized by the market.

Our next question is from Puneet Souda with Leerink.

Congrats on a really strong quarter. If you don't mind, I'll try to squeeze my questions into one. First, Shield growth is obviously very impressive. Can you talk a little bit about what's driving that AmirAli? PCPs among the PCP practices? Is it NCCN? Is it the ramp in the sales force? And wondering if you can give sort of an ASP number, it seems to be higher than the $800 that you had projected. So wondering where that's going to land. And around Shield, if I may also ask, Shield V2 is a big focus for investors. We were hoping for data by now. Any updates on that data? And I'll pause there. I have more questions, but I'll follow up with Helmy later.

Okay. Thanks, Puneet, for good question. So we are very excited with the Shield commercial performance. We are continuing to see a very strong pull by market. When physicians are becoming aware of this test and they're getting access to this test as we are scaling up our footprint in the field in terms of reps, we are seeing a very strong demand. And I think this beat and raise is really an endorsement of a higher productivity that we are seeing in this newly formed sales team that we have kind of assembled. And we are very excited about it and looking forward to see what we can do in second half of the year. Maybe I go to Shield V2 and then I give it to Mike to talk about ASP. As I mentioned in the prepared remarks, V2 is a very active program for us. A lot of work has gone into it and still it's ongoing, and we'll see what happens. Mike?

Yes. I can add on the ASP that we saw a really good uplift in Shield ASP in the quarter. We went from in Q1, ASP was just over $600. And in Q2, that increased to over $900. And the main driver of that obviously was that the ADLT status became effective on the 1st of April. So our Medicare rate increased from $920 to $1,495. And we're also seeing very strong Medicare Advantage reimbursement that's coming through now from pretty much all of the payers. And so that's helping to really stabilize that ASP. I think when we look at the back half of the year, and we said it in the prepared remarks, we'd expect our ASP for the next 6 months to be around $800. And so that will be slightly lower than Q2. And really, that's a function of the mix. As we continue to scale, we think we'll see more of the mix move from Medicare, Medicare Advantage on to commercial. So we're just allowing for that over the next 6 months. But yes, I think ASP story on Shield has been really positive for us this quarter.

Our next question is from Dan Brennan with TD Cowen.

Maybe just one on G360 since doing so well and it's your biggest business. Just could you give a little color in terms of kind of where the growth is coming from? Do you feel that you're seeing better penetration maybe locally or big AMCs? Do you feel like it's more just penetration in the existing market? Or do you feel like maybe you're taking share? And then the other factor is Helmy, you discussed a lot of the benefits of Smart Liquid Biopsy in terms of the performance. Is that resonating at the oncologist level? Is that really a sale into the hospital administrator? Just trying to unpack a little bit your growth versus maybe the other players in the broader market.

Yes. No, that's a great question. When we dissect the numbers, it really is a broad-based growth. We're seeing more oncologists than ever before ordering every single month. So that continues to grow pretty dramatically over the last few quarters since we launched Smart Liquid Biopsy. We're seeing higher depth. So in those same accounts, we're seeing a much higher average of number of 360 tests per month. And so that's really exciting. So we know that is coming from just the increased utilization of the test, we're growing the sort of market and use cases of liquid biopsy, but also significant share gains as well, which is great to see. And I think as I alluded to before, we have a test that truly has achieved much greater product market fit than anything out there. And when we talk about these features, these features are really resonating at the oncologist level. I was at ASCO. I can tell you that many of the key opinion leaders we work with, many academic center oncologists are really, really excited about these features. But these features resonate at the community level as well. The fact that we can do what sometimes tissue can't, the fact that we can see how the tumor is evolving from a subtype point of view, which has serious implications in terms of treatment decisions. We can see those patients who may be -- may qualify for certain drugs that many other tests out there can from immunotherapies to PARP inhibitors. And this is just the beginning in terms of what we're able to do. I can tell you that the pipeline we have of new applications and new apps that we're going to launch over the coming quarters is probably even more exciting than what we've launched today. So there's many things, I think as I told you we could do 3 years ago, most oncologists, most scientists would have said is science fiction. And that is really, I think, the power of this platform in terms of what we can do. And it's -- and you're starting to see it in the numbers on both the biopharma side and now the clinical side.

Our next question is from Tycho Peterson with Jefferies.

On Shield, congrats on the Vanguard enrollment. I'm just wondering if you can walk through kind of next steps to getting Shield marketed as an MCED test. Do you have to wait for data from the ongoing lung study or an interim Vanguard readout? How do you feel about inducement concerns? That seems to be a bit of a debate in the investment community. And then can you maybe just talk to your view on the risk around USPSTF? Obviously, if the whole panel gets replaced, that could throw a monkey wrench.

Yes. So Tycho, we are very excited with this progress we had on the R&D side. Now MCED is clinically validated. So it's clinically validated. We are not waiting for any other test or test to be a clinical-grade test. We spent some energy and effort to make it operationally ready for patient testing. And now that we have started the Vanguard study labs are running these samples. We are reporting out these clinical reports for patient management within the Vanguard. So from those aspects, we are actually ready. It's not that we are waiting for any kind of pivotal study readout to come before we take any action on broadening access for Shield MCED. As I mentioned in the prepared remarks, hopefully, we can have some conversation about it in the near future. And stay tuned about it. In terms of some of the -- I think, the matters you mentioned, we are very aware of the laws. We are here to help the patients. Never we are going to do something which is against the laws. And I think the way I read about it is the tremendous opportunity that we have with Shield that excites us. I think just over time, would increase. USPSTF very quickly. We are monitoring the situation very closely. Yes, it looks like the whole panel appears to be -- to get into the process to get replaced. The good success that we had with our Shield in the market right now with a very healthy gross margin and a very big greenfield, which is in front of us. We have a lot of actually opportunity in front of us to mine, build this business while we are waiting for task force guideline inclusion.

Our next question is from Subbu Nambi with Guggenheim.

You had recently said that Reveal was at approximately 1.7 tests per patient. How much do you expect the CRC surveillance reimbursement to drive this number upwards in the near term in 2026? And then in the long run, what do you think this number could look like? And I noticed in the catalyst slide, you don't have Reveal ADLT listed. I don't think that was on the slide before, but I'm curious if you have any updates there.

Yes. No, good question. We're already seeing it drive higher with some of the progress we've made. We've seen not only great traction, as we've said, Reveal is our fastest-growing product on the oncology side, really only second to Shield across the company. And so we're really excited about the progress we've made. We're seeing acceleration there. Really good traction with new patient starts, but even more so with subsequent draws, which is where we hadn't been pushing quite as much. Now that we've turned a lot of that machinery on really sort of -- it's been exciting to see how much we can start to lean into that and really drive that volume. So yes, I mean, I think the next few quarters and certainly into '26, we have high expectations for Reveal, and we can certainly get that number, I think, up significantly in terms of number of tests per patient. In terms of ADLT, that was number on the milestone chart there, but it's certainly something we've submitted for, and we are waiting for decision basically. Hopefully, over the next quarter or so, we'll know the resolution. I think we're very positive. We know that the test qualifies for ADLT. So hopefully, it will come back as a positive.

Our next question is from Kyle Mikson with Canaccord.

Congrats on a great quarter. Help me, why are you confident that Reveal Medicare reimbursement for breast is going to be obtained faster than CRC, including surveillance for colon that took a while. And then second for AmirAli, NCCN inclusion was nice, but is that having an impact on Shield volumes? Or do we need ACS and USPSTF? And then on the point of USPSTF from earlier, if the panel is replaced with people that clinicians don't really trust, is this going to make that milestone for you guys maybe less important?

A lot of questions. The -- in terms of Reveal Medicare coverage, the second time we got for CRC surveillance was actually pretty quick. I think it was just, I think, something like 4, 5 months, which as fast as it really comes in from a submission to sort of coverage. So yes, I mean, obviously, the first time we went through the process, it took a little bit longer. Second time, much, much faster. So I think we have a better sense for what is required from a Medicare point of view. Obviously, it's always up to their discretion in terms of what passes the bar or not. But clearly, having gone through the process multiple times now, we have a better sense of what is required. And so yes, we have pretty high confidence around -- we have good confidence around IO in terms of when we finally submit that to MolDX. And we're making good progress on other cohorts as well with Reveal. So it's an exciting pipeline for us.

Regarding NCCN guideline, definitely, it was a surprise, great milestone for us. How much of it is impacting our volume like within this very strong ramp that we are experiencing, it's very hard for us to kind of carve out the impact of each one of these kind of catalysts for us. But NCCN, again, it's the voice of expert oncologists at the end. So we are very excited with it. And we also continue to be very confident about inclusion by other guidelines, including ACS and USPSTF. I think some of the stuff is just common sense. You detect almost all Stage II and above CRCs, you can cure or have very long-term survival even if you detect CRC at Stage II. You want patients to be unscreened and do not detect their cancer. I think some of the stuff is just common sense. But over time, we are going to figure it out, but -- and we were very confident and we remain very confident about guideline inclusion.

Our next question is from Dan Arias with Stifel.

AmirAli, you were sufficiently vague on that answer to V2 data timing. Is everything squared away on your end and it's just a matter of when you decide to pull back the curtain on the results? Or are there still things that are being worked on there? Sorry to ask again, but hot topic to say the least.

No problem. I understand. So we are not putting a fine point on the exact timing of the V2 data. But as I mentioned, it's a very active program. A lot of work has gone into it. It's a lot of work is going into it as we speak. And we'll see like -- on the other side, we do not feel rush to get to this and some of it is really because of commercial success we are seeing by the currently approved product, the V1. It gives us opportunity to balance some of our R&D initiatives like we pulled forward this MCED clinical validation, bringing the lab and operation up for patient reporting, which can open up opportunities for us in near future down the road. And we'll see when we can wrap up this V2 still, we are working on it.

Our next question is from Patrick Donnelly with Citi.

Maybe one just on the profitability side. Nice to see the gross margins continue to creep higher with the profitability side. As you guys have advertised in the last couple of quarters, you're going to continue to invest that on the sales and marketing side. I mean, Mike, does that speak to just your confidence in the path to real profitability here in the out years, the fact that you are willing to continue to reinvest rather than chase near-term profitability. Can you just talk about the confidence in the balance sheet and again, that path to profitability as you reinvest some of these profit dollars?

Yes, Patrick. I mean, I think at a high level, at our last Investor Day 2 years ago, we set this path to profitability of 2028, and we said from then 2023, we would be reducing our cash burn every year. So far, we're on track, well on track with that. Things are going very well. And we remain very confident that we can get to breakeven in 2028. On the screening side, we sort of repeatedly said over the next couple of years, we'll manage the burn to something like $200 million, and we'll be very thoughtful about reinvesting the -- any additional gross profit back into the sales and margin line. And I think we're ahead of track the gross profit very strongly in Q2. It's 48% gross margins. And so we're reinvesting that, but that's not increasing our overall burn of the target that we set at the start of the year. And so I think we're managing that very well. And it's giving us -- this $200 million burn is giving us everything that we need to really scale that commercial infrastructure as quickly as we can. And if you exclude screening, actually, we're making fantastic progress. We said earlier on in the year that excluding screening, the rest of the business is on track to be breakeven before the end of the year. And that's still the case. And I think with the traction that we continue to see on ASPs better-than-expected gross margins, we feel really confident on that. So I think from a balance sheet perspective, to profitability, yes, we're still confident and on track to what we stated in the past.

Our next question is from Rachel Vatnsdal with JPMorgan.

I wanted to press on Shield V2 a little bit more, but more so around the time lines associated with it. So you previously had talked about hoping to get that launched by year-end. Not really committing to time lines in terms of when we'll see that data. But just given we don't have it yet, can you walk us through your updated assumptions on how long do you think it will take for FDA to review once they do have the data? And are you still on track to launch that by year-end at this point?

Yes. So I'm not sure how much I can add. But in terms of, yes, the time lines for FDA approval and launch, obviously, it's a function of when we get to the readout and how long it would take FDA to review our package. So we're pleased with a bunch of conversations we had with agency in terms of what they're going to look at and how they're going to look at. Now how long it's going to take to go through that review process, we have to see how long their process would take. But yes, but maybe in terms of end of the year, maybe that's fair. Maybe we are delayed a little bit. But as I mentioned, I don't feel rush to get to that milestone, and it was important for us to balance some of our R&D activities between V2 and MCED, and I'm very pleased with where we are today. And we are working on it very extensively, a lot of work is happening. So -- but maybe it's a little bit delayed.

Our next question is from Eve Burstein with Bernstein Research.

A couple on Shield. So now that Shield has had ADLT status for 4 months, you're through a chunk of the time that you have to get private payers to contract with you. So first, can you give us some color on how those conversations are progressing? I imagine that many private payers don't want to reimburse a test that won't get them quality credit yet. So how are you handling that? Second, do you expect to contract with private payers at or close to the ADLT rate? Or is the $920 rate more reasonable? Or do you expect it to be below that? And then third, you've given us a guide to ASP of $800 but for the rest of the year. But how should we think about what happens to ASP next year? Could it actually decrease pretty meaningfully as that rate resets and as the payer mix shifts up a bit?

In terms of conversation with private payers, we've been in touch with them. And even after NCCN guideline, we've been in touch with a fraction of commercial payers that we think maybe they would be early adopter. We'll see what happens. We are not counting on any major coverage before getting into ACS and USPSTF guidelines. So we'll see how it goes. In terms of expectation for ADLT rate based on the collections that we are having from Medicare Advantage, we are very confident of keeping our ADLT as what it is today as we go through the next reporting cycle, which is going to start from January of '26 till December of '27. So that $14.95, we are very confident it would remain the same. In terms of ASP, I think it's going to be a function of the payer mix. I think still we are in the early innings of this commercial execution. We are pleased with how the payer mix is landing at this time, but we are going to monitor it and then we would set expectation for ASP as we get closer to 2026.

Our next question is from Bill Bonello with Craig-Hallum.

I guess this one is for Helmy, maybe more big picture. Thinking about the traction that you've gotten with Guardant360 Liquid and the paradigm shift from years ago sort of tissue first to the big ramp you've had and the evolution towards people being willing to consider liquid first or looking at doing both. I'm just kind of curious how you might extrapolate that experience to Reveal and sort of this notion that seems to be out there that gosh, there's some superiority to tumor-informed and like tissue or tumor naive is fine if you can't get a tissue, but otherwise, you want to do tumor-informed. Could you see sort of a similar evolution? Are you hearing anything from physicians, KOLs in particular now that leads you to believe that will happen?

Yes. that's a great question. I think that maybe one of the sort of underappreciated aspects of our Infinity platform, the sort of Smart Liquid Biopsy ecosystem is that many of these apps that we're populating on 360 Liquid will eventually make their way to 360 Tissue and even Reveal where appropriate. And so when you think of where Reveal could be, it's going to look like a very different sort of product than any tumor-informed product out there that is just looking for sort of passenger mutations or a number of mutations that may not be actionable. And we're actually seeing the biology that is there in that individual, things like the subtype, how that's evolving, the potentially even toxicity from some of the adjuvant therapy that they're being exposed to. It really opens up a different space, which is why we've said that the MRD market will likely have two aspects to it. There will be a tumor-informed sort of market that some physicians would like to use. And there's going to be, I think, a pretty massive tissue-free aspect to it in market too. Just like there is in comprehensive genomic profiling, there's two big markets there. And I would argue that the liquid market in CGP, I think few would argue is ultimately going to be massively bigger than the tissue market. And we potentially see the same dynamic shaping up on the MRD side.

Our next question is from Yuko Oku with Morgan Stanley.

The recent SERENA-6 readout provides a compelling argument to monitor emergence of ESR mutation for treatment with camizestrant. What do you think may be the split at steady state to monitor emergence of ESR1 mutation between comprehensive panel like G360 versus hotspot tests? And also with cuts to Medicaid, what is your view on the impact to cancer testing more broadly?

Yes. So we really see this as a beachhead for a new paradigm in essentially oncology that will ultimately be the paradigm that I think all patients are monitored and treated with. And the point is ESR1 is the first of what we think will be many opportunities to switch therapies dynamically, really this idea of adaptive management of disease. And the camizestrant example, we are the enrolling assay. We will be -- if it gets approved, the official CDx for that, at least in the United States. And so I think we have a very good chance of not only opening the door in this new paradigm, but capitalizing on the majority of the opportunity and volume that would be there in the first couple of years. So we see it as, I think, a very significant upside opportunity on G360 volumes in the future.

One more question, please, operator.

Our last question is from Luke Sergott with Barclays.

This is Salem Salem on for Luke. Just kind of piggybacking off of a question before, I guess, on Medicaid, could you give us an update on what your exposure is to those volumes, if possible, by test, which I realize is a tall order. And if not, kind of ballpark numbers just given the expected fallout of the big beautiful bill? And what do you kind of expect on pacing of any potential headwinds this year or next year?

Yes, I can take that one. I mean very simply, Medicaid volume is very, very minimal in our overall volume across all products and even less so on the revenue side. So any impact overall to Medicaid isn't really going to have any impact on our overall volume or revenue.