GH - NASDAQ

Good afternoon. Thank you for attending the Guardant Health Q3 2025 Earnings Call. My name is Cameron, and I'll be your moderator for today. [Operator Instructions] And 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 September 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 call over to Helmy.

Thanks

Thanks, Helmy. Moving on to Slide 13. We delivered $24 million of Shield testing revenue in Q3, driven by approximately 24,000 tests. It's been incredibly rewarding to see Shield volume take off and hear story after story of patients positively impacted by this pioneering test, such as the story Helmy highlighted at the beginning of our call. Now turning to Slide 14 to take a closer look at screening highlights for the third quarter of 2025. Starting with CRC screening, given the strong performance and growing demand, we have accelerated the building out of our commercial infrastructure beyond our original plan. In addition, the breakthrough nature of the Shield brand has provided us with strategic partnership opportunities, including our recently announced collaborations with Quest Diagnostics and PathGroup. Shield continues to generate strong demand from both patients and physicians with high adherence rates. As exemplified by the patient story we shared earlier, we are seeing Shield tests get completed with blood samples received for more than 90% of ordered cases. This demonstrate the simplicity of Shield as a routine blood test for CRC screening that can be implemented into routine PCP practice. We are encouraged by the performance of our Shield CRC V2, which demonstrated solid clinical performance with improved sensitivity for stage I colorectal cancer. Turning to our multi-cancer initiatives. We are very excited to announce that Shield Multi-Cancer is now available nationwide through our clinical data collection initiative. At our Investor Day last month, we shared strong real-world performance data for Shield MCD from a study of 9,251 individuals. Specificity was 99%, consistent with earlier NCI findings and positive predictive value was 41%, meaning that when Shield MCD is positive, there was a 41% likelihood of cancer being present. Lastly, we are proud to partner with the American Cancer Society and look forward to ensuring that everyone has access to convenient and timely cancer screening so we can detect cancer earlier and provide opportunities for better outcomes. Taking a closer look at our recent strategic partnerships to scale our commercial infrastructure on Slide 15. First, we were very excited to announce a strategic collaboration with Quest to expand and accelerate Shield access more broadly in the U.S. Quest's provider clients will be able to order Shield tests and receive the results directly through the Quest connectivity system. We believe this strategic collaboration is valuable in two ways. First, it enables a better ordering experience and brings forward our nationwide EMR strategy by several years. This will gives us immediate connectivity to 650,000 clinician and hospital accounts in the Quest system. We believe this accelerated connectivity will drive our scale. We will also have access to deep logistical infrastructure, including 2,000 patient service centers, and 6,000 in-office phlebotomists in the United States. Second, Quest's promotional activities using their nationwide field force in combination with our own multi-hundred person sales force will further strengthen our competitive position in the primary care market. Quest's national commercial sales team will proactively educate primary care physicians and OB-GYNs about the Shield test, accelerating awareness and adoption among their ordering providers. We expect Shield to be available for physician order through Quest in the first quarter of 2026. We will continue to process all Shield test and control client services and billing and reimbursement operations. In addition, we recently announced our partnership with PathGroup, which expands Shield's reach to more than 250 health system across 25 states representing another exciting accelerator for physician and patient access. We are looking forward to seeing the positive impact of our growing commercial infrastructure in 2026 and years to come. We also remain confident in the potential inclusion of Shield in the American Cancer Society guidelines in near future which should be a catalyst for broader patient access. Moving on to Slide 16. Our goal has always been to detect many cancer types early when they are most treatable. With that in mind, we developed Shield as a multi-cancer detection platform. Turning to Slide 17. And as I mentioned earlier, we have now broadened access to Shield multi-cancer detection. In order for a patient to access this result report, their physician will need to opt in to receive the multi-cancer report and the patient will need to authorize the release of medical records to Guardant Health. We successfully piloted this workflow in several accounts and following overwhelming positive feedback from physicians and strong participation by patients, we expanded this offering nationwide. Moving on to Slide 18. The launch of this initiative establishes a scalable platform for clinical data generation, enables assessment of the utilization of MCD results in patient care and provides a new avenue to expand patient access to multi-cancer detection, bringing this important innovation to a broader population. This nationwide initiative is expected to reach hundreds of thousands of participants, making it one of the largest prospective evidence generation initiatives for early cancer detection. Turning now to Slide 19. With the expansion of Shield to include MCD results together with patient authorization to release medical data, we are now well positioned to further strengthen our data moat. This high-quality data serves as a regulatory grade source of truth, providing details on each patient's cancer journey that were previously not accessible. We will generate large-scale prospective evidence about the performance, clinical value and safety profile. We believe this high-resolution data will power continuous improvement of Shield MCD and also lay the foundation to potentially expand into multi-disease detection. With that, I will now turn the call over to Mike for more detail on our financials.

Thanks, AmirAli. Turning to Slide 20. I will now review select financial highlights for the quarter ended September 30, 2025. Unless otherwise noted, all growth rates are year-over-year. Total revenue for the third quarter grew 39% to $265.2 million driven by strong performance across all 3 major revenue lines: oncology, biopharma and data, and screening. Oncology revenue increased 31% to $184.4 million primarily driven by another quarter of accelerated test volume growth. We reported approximately 74,000 oncology tests in the third quarter, representing 40% growth reflecting continued positive momentum across the portfolio. Guardant360 Liquid delivered its fifth consecutive quarter of accelerating growth, with volumes up more than 30%, supported by the expanding clinical utility enabled by Smart apps launched over the past year. Guardant360 Tissue also had an exceptional quarter, showing strong year-over-year acceleration following the major product upgrade released in the second quarter. Reveal remains our fastest-growing oncology product, benefiting from CRC surveillance reimbursement achieved earlier this year and continued strength across both breast and lung cancer indications. As a reminder, we do not include Guardant Hereditary Cancer testing or IHC volumes in our reported totals. We continue to expect minimal revenue contribution from these new offerings through 2025. Average selling prices remained stable compared to the prior quarter. Guardant360 Liquid was in the range of $3,000 to $3,100, Guardant360 Tissue was approximately $2,000, and Reveal was in the range of $600 to $700. We also recognized approximately $5 million of out-of-period oncology revenue in the third quarter compared to $12 million in the prior year period. Our biopharma and data business continued to perform well, with revenue increasing 18% to $54.7 million, which includes milestone revenue from 2 companion diagnostic approvals achieved during the quarter. The biopharma pipeline remains solid, providing confidence in both the near-term and long-term growth prospects. Screening revenue from Shield totaled $24.1 million generated from 24,000 tests reported during the quarter. Shield ASP was approximately $880 above expectations, reflecting our continued focus on Medicare-covered patients. We also recognized approximately $3 million of out-of-period screening revenue, driven by better-than-expected reimbursement from Medicare Advantage payers for tests performed in the first half of 2025. This positive trend reinforces our confidence in both near-term and long-term expectations for Medicare Advantage reimbursement rates and overall Shield ASP targets. Turning to Slide 21. We’re very pleased with the year-over-year improvement in non-GAAP gross margin, which increased to 66% in Q3 2025 compared to 63% in the prior year period. This improvement was primarily driven by a significant reduction in Reveal COGS, which have declined from over $1,000 per test in Q3 2024 to less than $500 per test, as well as strong progress in Shield gross margin. Shield's non-GAAP gross margin improved from negative levels at the launch just over a year ago to 55% in the third quarter of 2025. This improvement reflects strong ASPs under the Medicare ADLT rate of $1,495, disciplined focus on reimbursable tests, and continued COGS reduction. Shield's non-GAAP cost per test again trended lower sequentially and continues to be below $500 per test, consistent with our operational plan. These gains reflect the ongoing benefits of increased Shield volume and disciplined cost management. Turning to Slide 22. Non-GAAP operating expenses were $228.8 million in the third quarter, an increase of 22% in line with expectations. The increase was primarily driven by continued investments to expand our screening commercial infrastructure and scale sales and marketing for Shield. As we conclude 2025 and enter 2026, we will maintain focus on these investments to maximize our first-mover advantage in blood-based colorectal cancer screening. Adjusted EBITDA loss was $45.5 million, an improvement of $10.7 million compared to a loss of $56.2 million in the third quarter of 2024. We remain disciplined in our approach to cash management. Free cash flow burn was $45.8 million, improving by $9.5 million compared to the prior year period. Importantly, excluding the screening business, Guardant generated positive free cash flow during the quarter, a significant milestone achieved one quarter ahead of our stated target. We expect the core business to remain free cash flow positive in the fourth quarter as well as for the full year 2026 and beyond. We ended the quarter with approximately $690 million in cash, cash equivalents, and restricted cash. Turning to the full-year 2025 outlook on Slide 23. Based on our strong year-to-date performance, we are raising full-year 2025 revenue guidance for the third time this year to a range of $965 million to $970 million, representing approximately 31% growth compared to 2024. At the midpoint, this represents an increase of $47.5 million versus our prior range. We now expect oncology revenue to grow approximately 25% year over year, up from prior guidance of 20%, driven by stronger-than-expected oncology volumes in the third quarter and higher expected volumes for the remainder of the year. We now forecast total oncology test volume to grow more than 30% compared to our previous expectation of greater than 27%. Our biopharma and data business remains on track to deliver mid-teens growth for the full year. We’re also increasing our Shield revenue guidance to $71 million to $73 million, up from $55 million to $60 million, reflecting higher expected volume of 80,000 to 82,000 tests compared to prior guidance of 68,000 to 73,000 tests. With continued improvement in gross margins, we’re raising our full-year non-GAAP gross margin guidance to 64% to 65%, up from 63% to 64%. As previously outlined, we plan to reinvest incremental screening gross profit to accelerate commercial expansion. Accordingly, we now expect 2025 non-GAAP operating expenses to be in the range of $865 million to $875 million, representing a 14% to 16% increase compared to 2024. Finally, consistent with our long-term financial roadmap, we remain committed to reducing cash burn each year and achieving company-wide cash flow breakeven by the end of 2027. For the full year 2025, we continue to expect free cash flow burn of $225 million to $235 million, an improvement from $275 million in 2024. Turning to Slide 24. We began 2025 with an ambitious set of strategic and operational objectives. Through our strong execution, we’ve delivered on nearly all of them, and we expect continued momentum as we close out the year. Our progress this quarter positions Guardant for sustained success in 2026 with continued oncology volume growth and strong Shield adoption. With that, we will now open the call for questions.

Thank you. [Operator Instructions] The first question comes from the line of Bradley Bowers with Mizuho.

A strong performance across the businesses, but I am going to focus on Shield here. I was wondering if you could walk us through the Shield ASP dynamics exiting the year. Continued strong pricing, I don't think it's surprising given the ADLT pricing, but that $900 we’re exiting the year at. It’s supposed to walk down to $700 by 2028. I know there are some mix implications there, but is it a steady degradation? Is there a fallout expected as ADLT pricing rolls off the initial phase at the end of this year? Any color on the phasing of that would be helpful. Thank you.

Yes, Brad. This is Mike. I can take that. Yes, I mean, to break down the -- what's in the Shield ASP, we have the Medicare rates at $1,495 that came into play at the start of the second quarter. We’re also receiving really good payment from Medicare Advantage payers. And so, when they are paying us, they are paying us at this $1,495 rate also. And at the moment, the majority of our volume is skewed towards Medicare and Medicare Advantage. And then we have a tranche of commercial patients, and we’re effectively getting paid more or less 0 for those. And so, as we look at over the next few years, we’re very confident in the $1,495 rate -- ADLT rate going forward. And in fact, we’ve just submitted our package back to Medicare on the date of submission of the pricing over the last six months, and that should help us maintain this $1,495 rate now, at least for the next 2 years. And going forward, also, we expect Medicare Advantage to continue to be strong. In fact, we would hope that it can get stronger than where it’s today. The fluctuation over the next couple of years is going to be the percentage of commercial payer patients that we have and how quickly we can ramp up the commercial reimbursement there. And so, we’re assuming in 2028, there’s just a higher proportion of commercial patients in the mix. And it’s going to take us time to establish that reimbursement rate. But overall, we’re really happy with where the ASP is today, and we think it bodes well for as we go into 2026 and beyond.

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

So another question on Shield. You mentioned at the Investor Day, and as well as in your prepared remarks that potential ACS guideline inclusion later this year could set the stage for commercial coverage and I think, at least 10 states. And we believe Anthem and other large Blues are watching closely. So to the best of our knowledge, ACS concluded their CRC screening guidelines review earlier this month. With that in mind, is guideline inclusion at this point a real possibility by year-end with ACS? And then once guidelines are in place, how long do you think it’s going to take for that to translate into you actually getting paid? And then the final component of the question is, beyond those initial 10 or so states, there are other states like Florida and Louisiana where mandates have been brought in to include ACS as well as NCCN in addition to USPSTF. So if we think about that broader universe of states, which I think maybe gets you closer to 17, is it likely that reimbursement could occur not just in the initial 10%, but closer to 20% over the next year or so?

Thank you, Doug, for your question. Yes, based on what we know, it appears that ACS research team is almost done with their work. So we remain confident about this potential for Shield to be included in near future. We are monitoring the situation very closely, but we are very optimistic about that. In terms of the guide, like, it’s not part of this year guide. We are not counting on any kind of upside associated with the ACS guideline and, it’s going to take some time. When we go into the guideline, it gives us initially some upper hand, and it should have a strong -- it should have a positive impact on our appeal success rate initially. And then at some point, that would result into product coverage and contracting successes. I am proud of what our team has achieved so far on trying to broaden access to Shield. You noted Florida now through a consortium of supporters of making sure that innovative technology becomes accessible. Now, for instance, Medicaid patient population in Florida have access to tests like Shield, and we are very proud of that. And in general, we are very pleased with some of the positive and regular dialogue that even we have with the administration about their priorities around cancer screening, around prevention, around making America healthy. And I am excited that looks like both the President and Secretary are looking for ways to see how maybe the rate of cancer can get reduced in the country and how could we try to bring innovations to patients in a faster way. But we'll see what happens. But, obviously, we are not counting on any of those successes in our drive at this time.

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

Really impressive quarter here and really strong guide. If I may, AmirAli, first one on Shield. Just growth is accelerating on volumes, rightfully so, new product and ASP is also up. How should we think about 2026 growth for Shield and any early reception details that you can talk about on the MCD side? What's the early attach rate? And for Helmy, it's been almost a decade since you launched G360 when it appeared on the market for the first time. It' really impressive to see 10 years later, this product is growing 30% plus. Maybe just talk to us about what's behind that and how should we think about the growth going forward here for the Liquid G360, which has been impressive?

Maybe I will make the Shield part quick so Helmy can talk to you about the oncology side. So as you have seen, we consistently raised our outlook throughout this year. We are very pleased with what we are seeing, the momentum that we are seeing. We want to be thoughtful and not get ahead of our skis. So, I think still it's too early for us to comment about 2026. At the right time, we will talk about it, but we continue to be very confident about the long-term outlooks that we shared in our Investor Day.

Yes. No, we're very pleased with the performance. It's actually been 11 years and counting in from when we launched in 360 and so, to see it grow at this rate, I think at this point in the product cycle it's really pleasing, but I think it’s what we expected in the sense that many people think of this as a test and they pattern match it to other tests in the market. But it truly is an application platform. When you think about these Smart apps that we’re introducing and really the multiplication of clinical utility and ability and capabilities of this platform, this is just the beginning in terms of where liquid biopsy can go. I mean, that’s the point of liquid biopsy is you can come in, you can test many more patients, you can increase access. But you can test them longitudinally as well. And we’re still at the very, very early innings in terms of where this can go, where this technology can go just in oncology. So I think you are going to see a lot more, I think, of this trajectory in the coming years as we continue to expand on the capabilities of Guardant360 over the next decade.

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

If you were to put a timeline -- if we were to put a timeline to NCD FDA approval based on Shield trajectory next year, would FDA submission for MCD in late 2027 be a reasonable expectation?

For MCD, we just actually broadened access, and we just actually started getting access to this clinical data that I talked about during our Investor Day and the prepared remarks. So we need to monitor it and see how quickly we can build that evidence. But we are very optimistic that potentially through the way that we are doing, we can get access to hundreds of thousands of patient data and monitor actually the impact of MCD testing in the clinical value, performance, safety. It’s still too early for us to specifically put a timeline for FDA approval. But we would monitor the situation closely and as we get more confidence, maybe we can talk about it at the right time.

The next question comes from the line of Patrick Donnelly with Citi.

Helmy, maybe one for you on Reveal. I know in the past, you've talked about driving the test per patient higher. Can you just talk about the traction there given the bigger push internally? What kind of progress you're seeing? Where can that go over the relative near term? And I know during the prepared remarks you talked about obviously the ongoing studies, the additional tumor types. Can you just talk about what we should be looking for and the key catalysts on the Reveal side here over the next couple of quarters to keep an eye on?

Yes. Great question. I think we said at the beginning of the year, as we got the surveillance indication from a reimbursement point of view for Reveal that would be turning on a lot of the capabilities to be able to pull in subsequent test orders and so on. And I am pleased to report that, we’ve put a lot of those in place, and we’re seeing some of the benefits of that and the return on investment there. So we know we can pull in subsequent orders now in a very straightforward way and so that’s going to pay dividends across our blood-based portfolio as we think about the emergence and really, the place where longitudinal testing will sit in terms of management of patients in oncology with things like SERENA-6 in terms of ESR1 with the upcoming launch of our therapy monitoring based on Reveal. And then, obviously, with Reveal itself in the MRD setting, recurrence monitoring setting. So yes, really great progress. The number of tests per patient has gone up pretty nicely, and we’re still, I would say, very much in the early cycles of really capitalizing on that investment.

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

I would love to hear your views on the PEGASUS data and just how you think about that having any impact on just MRD-driven therapy management? And then how are you thinking about clinical utility evidence in general and NCCN guidelines?

Yes, PEGASUS was a really interesting study. It was a Phase II signal finding study, and I think there are a few things that showed that I think were exciting to me, which is the fact that you could spare something like 75% of patients from chemotherapy, which meant, huge, huge reduction in terms of neurotoxicity and other toxicities related to such really harsh chemotherapy. And so I think PEGASUS was based on our previous version of Reveal. And so I think we’re really looking forward to TRACC, which is based on a newer version. And really, the field, having larger datasets to really understand exactly where the threshold should be in terms of escalation and de-escalation in terms of patients. But I think it’s clear that I think there can be a lot of benefit by using this additional data in terms of ctDNA in the adjuvant and surveillance settings. But I think this is a good foundation and one that we can build on as we continue investing in both clinical validity and clinical utility studies around our Reveal platform.

The next question comes from the line of Bill Bonello with Craig Hallum.

I just want to push a little deeper on [Suneet's] third question about the growth in Guardant360. Could you just give us some sense today? I mean, if we think about what’s out there that’s driving, there’s the underlying growth, there’s the fact that you are probably taking share. But I am also curious about where we stand today in terms of a paradigm shift to liquid first or perhaps to combination testing with liquid and solid tumor. And then to what extent were – we are seeing some of the repeat testing that you are talking about or the use of 360 for monitoring? Just trying to get a sense of what inning we’re at in terms of some of these new growth drivers and how much of that is still in front of us?

Yes. Great, great question. So we’re still very early even in the penetration of liquid biopsy in terms of one test per lifetime. And so given, the capabilities of 360 right now, they are just mind-blowing to a lot of physicians just in terms of the depth, the sensitivity, the application space. We see that growth -- in just that initial setting. So that means not only market growth, but we’re seeing from what we can see, significant share gains as well as a result. Then there are other growth drivers we’re seeing. The fact that concurrent testing will likely become the standard of care of both tissue and liquid. And so that is also another growth driver and we're starting to see that really, really take off. And then finally, the test for patients. And so we estimate at maturation that we should be able to go from 1 test per patient per lifetime to something like 4.5 or 4 or 5 tests per patient per year which, obviously means more than, probably doubling of where the market is today – sorry more than a 10x in terms of where the market is today. And so that’s really exciting in terms of where things are going, and this is things like SERENA-6 in terms of ESR1, longitudinal monitoring, therapy monitoring, the data that we have with IO monitoring, with chemo monitoring, and so on. All of that will feed into essentially establishing this new paradigm of essentially monitoring patients with ctDNA. We’re already seeing our biopharma partners use this type of testing to -- in their Phase I, Phase II, Phase III studies using it to decide do they scale Phase I to Phase II, using it for dosing. And so that’s the other piece that I think is not very well appreciated is that a lot of tests you launch them they are used exactly the same way 10 years later or 15 years later and so on. They only have one function. The application space and utility of how you use the -- something like Guardant360 and Guardant Reveal is really multiplying quarter by quarter and year by year. And so, yes, this is a true platform. That word is often overused, but this is a true platform, and you are seeing what that means in terms of our volume growth and the trajectory that we laid out at our Investor Day.

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

This is Aaron on for Mike. I wanted to dive into Reveal volumes and specifically Reveal versus Ultra and how you guys are thinking about the R&D investment needed in both of those assets? And then the second part of that is MRD is still a fairly open space,10% penetrated, what people are saying. So I guess, how are you guys looking at the market? How are you guys looking at growth? And how should we be expecting both of those assets to grow over the next 3 years?

Yes. We’re very excited about our MRD franchise. Reveal is the leading tissue-free MRD test in the market. We know that there will be essentially 2 parts of the market that will be important, the tissue-free side and the tumor-informed side of things. And we're very pleased in terms of where we sit in the tissue-free side. It’s our fastest-growing product in oncology. And the amount of data, the amount of investments, we have a 10x data generation planned as we presented before next year. And so that flywheel is really chugging away. And so we’re excited about that trajectory. And then in terms of the tumor-informed side I think we agree with you, there’s a lot of opportunity there in terms of a test that can really hit the needs of both biopharma and clinicians in terms of sensitivity that is really acquired for that setting. And, yes, we’re just very pleased with the technology that we’ve developed. If you think about it, just everything we’ve built as a company is at a really nice point. The fact that we’ve really chugging away on our tissue volumes and the capabilities we have with using very low amounts of input material, very fast turnaround times. The sensitivity we have on the liquid biopsy side and the capabilities, COGS down and the speed to results, all of that is coming together in Reveal Ultra. And I think it’s going to be a product that will, frankly, blow everyone away once we launch it. Very excited for that and making really good progress.

The next question comes from the line of Daniel Markowitz with Evercore ISI. Daniel, your line may be muted. Our next question comes from the line of Mark Massaro with BTIG.

The first one is for you, AmirAli. Just looking at the Shield, it’s great to see this trajectory. Is it reasonable to think in the near term that 1,000 sequential increase from the prior quarter is the right way to think about this just looking at the Q4 implied guide at the high end, it’s plus 9%. You just did plus 8% prior quarter plus 7%. Or -- so I guess I am asking if this is a reasonable run rate in the near term? Or do you think there’s obviously upside from partnerships with Quest, PathGroup, certainly guideline inclusion and potential DTC uplift? So that’s my first part. The second part is for Helmy. Helmy, can you just give us a sense for Reveal Ultra? I believe this is the tumor-informed that can go down to 1 part per million. Just give us a sense for -- maybe if you could clarify if that is commercially launched now and how we should think about the timing of CMS reimbursement and additional data readouts? Thanks.

Thanks, Mark. So in terms of sequential growth, like our guide, what has ended in the midpoint is like another 8,000 Q-over-Q growth in Q4. We are going to monitor the situation closely. And again, we don’t want to get ahead of our skis and see what’s going to happen and for next year, we are going to talk about it at the right time. There are a bunch of catalysts still in front of us. There’s Quest, PathGroup collaboration should be a positive thing. Guideline inclusion is definitely a positive thing. Continuous build-out of our own commercial team as we go into next year would be a positive thing. So -- and we are confident about the target that we put out there for 2028. So -- but we go at it one step at a time, and we are very excited to see what’s going to happen in Q4.

Yes. In terms of Reveal Ultra, I think the nice thing is we built such strong capabilities around MRD. When you think about the R&D and all the clinical studies, tens of thousands of samples and many of those we’ve actually retained tissue. So it’s actually, not, very heavy investment for us to essentially leverage that to really come out with the Ultra technology, the tumor-informed technology we have. We’re seeing really good data, really excited in terms of where this can go. In terms of the sensitivity, we think it can bring it down to a much lower level than exists in the field or frankly, exists in the pipeline of companies we’ve seen out there. And I would say that in terms of timing, we’re keeping that close to the chest. So stay tuned, but making good progress and we wouldn’t be talking about it if it wasn’t something that was not in the too distant future.

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

On the Shield performance in the quarter, maybe as a follow-up to Mark's question. Can you provide any KPIs around maybe average testing frequency per physician and whether volumes are coming from new time CRC screeners? And then just my second question here. Mike, if you can provide any color on gross margin for Shield and Reveal embedded in the updated guide of 64% to 65% for this year, that would be helpful?

Yes. Maybe some KPIs. Actually, it's exciting that the breadth of ordering continues to increase Q-over-Q. The depth of ordering continues to be very strong. So once the accounts actually start using Shield and we go through activation, the depth of ordering is very solid, which is really an endorsement of how deep this market is and mainly how many under screened cancer patients are out there in the accounts that we are going to. So we are seeing their doctors. We are successfully leading them and so forth. So the other KPI to share, which we are very excited about is we continue to see very high adherence rate when the doctors order their stuffs more than [indiscernible] gets converted to a sample received in our lab, which really gives us bunch of efficiencies in our S&M investments.

And Don on the gross margins which yield -- in the prepared remarks we mentioned that the Shield gross margin this quarter, Q3 was 55%. And so, ISPs are close to $900 and our cost per test now is consistently lower than $500. So we made really great progress with Shield’s gross margin. And then on the Reveal side, again we’ve made fantastic progress over the last 9 months or so. And just to bring that out a bit know how ISPs for Reveal continue to be in the $600 to $700 range. And again, since this part of the year Reveal cost per test are consistently below $500. So, we have a nice gross margin on Reveal. It’s a little bit lower than the 55% we’ve got on Shield. But there really what’s helping drive our overall cleanly gross margin and we see in that the positive impact in that we’re going from 63% in Q3 last year to 66%. So I think good progress across the board with gross margin.

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

Congrats on the quarter. On Reveal, is it still possible you get ADLT status and breast Medicare coverage by the end of this year? Is that more likely a '26 milestone? And then secondly, AmirAli, we had a competitor this week announced advanced adenoma sensitivity data for its colon cancer blood tests. The confidence interval lower bound was 15% and the study had a lot of very small lesions. Just curious if you think that a test with AA materially higher than the 13% for Shield would pose a threat and you would like, when they aim to improve upon your AA data still?

Yes. I mean ADLT status is still a work in progress, obviously, with the government shutdown paused some of the discussions a little bit. And then we're still working in breast and IO. We've always said probably more likely early next year. And yes, we're still, I think, on track for that.

Regarding the data disclosures, we -- obviously, we applaud anybody who's trying to contribute in this difficult area. This is a hard science area. And we feel very comfortable with our leadership position. And our technology stack, our data, and what we are doing. We have seen similar results in this field now a few times. Again, this is a hard field. It is a hard science field. And we believe we have the best tech stack, very innovative technology at home brew that gives us confidence. We have a 3 year head start on CRC now. And know, probably even much longer on the multi-cancer side relative to some of these competitions. So we feel very good with our position at this time. And, definitely, there are some fine activities that we are working on. We will see what happens.

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

Just wanted to touch here on the step-up in OpEx that you guys have for the year and implied in 4Q. And really just dig in where that spend -- the incremental spend is going and where you guys think from an S&M perspective? Where you guys want to exit the year as a number of reps as you think about Shield and oncology and Reveal? And how that -- if you're able to pull forward any of those costs given the success you've had in some of these -- some of the other launches?

Yes. I mean for the OpEx step-up, it's pretty much all in the sales and marketing line. I think we've been consistent throughout the year, whereby we said we're going to be reinvesting any incremental gross profit in screening back into the sales and marketing line to really drive that commercial build-out. So -- and we'll continue to do that. I think it's the biggest focus for us as we look to scale. We said on the screening side, we've now got over 250 salespeople out in the field. So that's a significant ramp-up during the year, and we'll continue to look at how we build that out. On the oncology side, it's a little bit larger than that. And we've got a very sort of well-built out commercial infrastructure with oncology. But yes, as we look forward and go into 2026, I think you should expect to see a similar ramp in the sales and marketing line. We're very focused in the R&D line and the G&A line and keeping them relatively flat. And so I think that's the plan for the next 12 months.

The next question comes from the line of Daniel Brennan with TD Cowen.

Congrats on the quarter. Maybe just on G360, just a couple. Maybe one for Mike and then one for Helmy. Just on the guide, I know that clinical oncology volume guide is now greater than 30. Does that contemplate like a big step down from the G360 line, which is accelerated tremendously year to date, obviously from the Q3 30%? And then B, more so for Helmy. I know you have given a lot of color on the excitement over the outlook for G360. But could you give a little more color on the acceleration you have seen year to date? Is it more share gains which you talked about? Like are you seeing like hospitals consolidate? Do you think it is more just penetration of CGP? Or do you think it is more like this test per patient pickup? Any way you can kind of dissect a little bit of this really strong acceleration?

Yes. Maybe I will just start on Q4 guide. So, we had a great Q3. I think our guide for Guardant360 volume and for overall oncology volume, it implies sequential growth in Q4. It implies a very strong year-over-year growth in volume. So yes, if you back into it, it’s over 30% year-over-year growth in Q4. So I think we have just continued to expect the momentum that we saw in Q3 continue to Q4. So I think for us, things are looking very strong as we get towards the end of the year.

Yes. In terms of growth driver, I think what you are seeing really is the fact that it is just a very compelling test from a value proposition. So I think a lot of what you are seeing is some of the share gains from the other tests in the market from other hospitals and so on. So that’s been exciting. We are seeing a little bit of the increase in testing in terms of longitudinally, but I would say that’s a very minor part. I think that’s still a lot of -- that’s still another major growth catalyst for us in the future that we have not really tapped into. And then the third piece is this test has so many capabilities. Things like being able to determine the type of cancer, what someone who has a cancer of unknown primary, subtyping. So if you think about the long tail of cancers where liquid biopsies and even tissue -- tumor biopsies aren’t really utilized, the fact that we have this smart platform with epigenetics and so on that can give so much more insight into tumor biology. I think you are seeing penetration into some of these longer tail of cancers as well.

Our last question comes from the line of Dan Arias with Stifel.

Helmy, I just wanted to go back to Reveal. Can you maybe talk about where things are on the commercial side when it comes to reimbursement in colorectal? What’s a good ballpark number at this point for just the percentage of tests that are getting paid for, I guess, Stage II and Stage III patients would be the right subpopulation to ask about there? But really just trying to understand [indiscernible] side of CMS in your key indication there?

Yes Dan, it’s Mike here. It cut out a bit towards the end, but I think you're asking about Reveal reimbursements with CRC. CRC now is -- it's roughly 50% of our volume. It continues to be at that sort of level and the rest being made up at the moment from breast and lung and where we are getting reimbursed is for all of the -- now whenever we run a CRC test, we're getting reimbursed for all of these tests that we do for Medicare, and that's at the $1,640 rate. And we're getting good pull-through with Medicare Advantage. We're starting to see traction with commercial payers. That's improving all of the time. And so I think we're feeling good at where the reimbursement level is. And then as we look forward, we think there's continuous runway with Reveal. Again, more and more Medicare Advantage and commercial payments on the CRC side. But as we just mentioned, we are anticipating Reveal breast reimbursement. We've submitted the data package to MolDX for Reveal IO. And so hopefully, going forward, we're getting incremental Medicare reimbursement and incremental reimbursement from all of the payers as we move into '26.