Natera, Inc. (NTRA) Earnings Call Transcript & Summary

Hello, everyone. Thank you for joining us, and welcome to Natera's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] I will now hand the conference over to Michael Brophy, Chief Financial Officer. Michael, please go ahead.

Thanks, operator. 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; Solomon Moshkevich, President, Clinical Diagnostics; and Alexey Aleshin, General Manager of Oncology and our Chief Medical Officer. Today's conference call is being broadcast live via webcast. We will be referring to a slide presentation that has been posted to investor.natera.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?

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 million 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 U.S. 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. Our new range is $2.85 billion to $2.91 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 Focus 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 the 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'm 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 of 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 are pleased to see Signatera ASPs increase again. Signatera ASPs were up to roughly $1,275 as we continue to drive more consistent reimbursement for 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 talked in the past 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 2 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 scaled, and we're already executing on that road map. 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-up 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 [ 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. It combines the best of both worlds, the power of SNPs for fetal fraction measurement, triploidy detection and twin zygosity and more, along with excellent performance at low fetal fractions, bringing the overall no-call rate down to 0.5%, 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 OB/GYNs 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 multiyear 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 3 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 1 after surgery, Medicare will cover 6 tests for patients with kidney transplant and 12 tests for patients with heart and lung transplants. Then in years 2 and 3, Medicare will cover 4 tests per year across all 3 categories, which is significantly higher than the original proposal. This improvement reflects strong advocacy from the clinical community. After the draft was originally published by Medicare in July of 2025, major transplant medical society 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 30 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 III IMvigor011 trial, it validates the whole TOMR concept treat on MRD, at the highest level. Then in June, the Japanese PMDA approved Signatera for patients with colorectal cancer, supported by the GALAXY study. We expect the 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 that are 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 GALAXY trial in CRC. We think bladder represents a compelling second indication for Signatera in Japan with strong evidence for serial testing every 6 weeks, and we expect regulatory approval later this year or early next year. Finally, we were very pleased to see the NCCN issue its Category 1 recommendation in support of Signatera testing in bladder cancer. Category 1 is NCCN's highest designation and based on the most compelling randomized evidence. Furthermore, the NCCN specifically called for ctDNA testing using a personalized tumor-informed multiplex PCR-NGS assay, which is language that uniquely describes Signatera. This is now the third NCCN guideline to positively recommend tumor-informed MRD testing with prior recommendations coming in Merkel cell carcinoma and diffuse large B-cell lymphoma, all of which reference Natera's data. This guideline update is expected to drive adoption across multiple vectors. As Steve described earlier in the call, it is already resulting in new customer starts and more systematic use among existing customers, those who like to wait for NCCN recommendations prior to adoption into standard clinical use. It's really creating an inflection point in the field for which Natera is exceptionally well positioned based on our gold standard clinical evidence, our operational excellence and our industry-leading analytical performance, especially with the phased variant technology acquired late last year from Foresight Diagnostics. The NCCN guideline is also driving new positive coverage policies among commercial payers, far beyond what we could achieve with just the biomarker legislation alone. Some commercial plans already have blanket coverage policies in place for FDA-approved companion diagnostics or NCCN recommended tests. But most commercial plans are publishing new coverage policies to cover Signatera. We expect this to drive meaningful ASP improvement. Finally, as more clinical evidence is published in support of MRD-guided precision medicine, we expect further progress with Medicare coverage, NCCN guidelines and commercial payers. With that, I'll hand it over to Alex to discuss our clinical road map. Alex?

Thanks, Solomon. I want to spend a couple of minutes on the depth of the clinical evidence engine we've built behind Signatera and why we think it's such a durable advantage. If you look at Slide 13, you can see the shape of that engine. For years, much of the MRD field, ourselves included, built its early evidence on retrospective biobank studies. These studies are valuable. They're efficient, and they let you establish prognostic performance across many tumor types quickly. But retrospective data on its own only takes you so far. What actually moves guidelines and unlocks broad reimbursement is prospective evidence, studies designed upfront, run in real time and in many cases, randomizing patients or tying Signatera directly to a treatment decision. That evidence is a different order of magnitude and carries far more weight with guideline committees and with payers. It also takes real effort and takes years to generate. We made the decision to invest in that harder path early. We've been signing and initiating prospective studies since 2019, and we've been building this flywheel quietly in the background for more than 7 years. Today, as the chart shows, we've opened more than 70 prospective studies of various forms, spanning our own sponsored trials, pharma partnerships and academic and cooperative group collaborations. The key point on this slide is what happens next. For most of that period, we were putting studies in, investing ahead of the return. Now the flywheel is starting to really turn. These studies are beginning to read out. You can see this inflection on the right side of the chart, and we expect the pace of readouts to accelerate meaningfully over the next few years. Each readout is a potential catalyst for guidelines, for reimbursement, and ultimately, for volume. This is the part of the story that compounds, and it's very hard for anyone starting today to replicate. We are just now entering the harvest phase of an investment we began 7 years ago. I want to discuss in more detail, the Natera sponsored portion of our clinical trial portfolio. I'm excited to introduce SIGNAL-ER 101, the first interventional prospective study that Natera is sponsoring and operationally running ourselves, end to end. The study is now open, and early reception from investigators has been excellent. Let me frame the clinical question because it's a big one. In early-stage HR+/HER2- breast cancer, the most common form of breast cancer, the vast majority of patients today may be overtreated. When patient is considered high risk, the standard is to add a CDK4/6 inhibitor on top of endocrine therapy. But these are difficult drugs to take. More than 60% of patients experienced serious adverse events, and a full course of therapy can carry a U.S. retail cost north of $400,000. And the reality is that many of these patients were likely already cured by standard perioperative therapy alone. SIGNAL-ER 101 ask simple powerful question: What if we use Signatera to identify patients who actually need that escalation? In the study, patients are surveilled with Signatera after surgery and treatment is escalated to CDK4/6 inhibitor only when we detect molecular residual disease. MRD-negative patients are spared a toxic and expensive therapy they may never have needed. This is exactly the kind of high-value clinical question MRD is uniquely positioned to answer and the addressable population is large, representing a meaningful share of the more than 200,000 women diagnosed each year in the U.S. with HR+/HER2- breast cancer, the majority of them early stage. I want to be clear about why this matters strategically. SIGNAL-ER 101 is the first of a broader interventional portfolio, the SIGNAL program, and we have multiple additional interventional studies launching over the next few months, covering a significant portion of the largest tumor histologies. These studies are designed to pharma standard. They can be viewed as equivalent to Phase II or Phase III trials with the same implications if they succeed, namely the potential to change practice and help define a new standard of care. And critically, we've built the infrastructure to run these ourselves efficiently and cost effectively. Owning operational execution means we control the quality, the time lines and the economics. It lets us bring rigorous potentially practice-changing studies to questions that matter most to physicians and their patients on our own terms. Finally, let me update you on the progress in early cancer detection. We continue to be enthusiastic about the data we previously presented. PROCEED-CRC demonstrated excellent performance, including a 22.5% sensitivity and a 91.5% specificity for advanced adenomas, a notoriously difficult target and a strong signal for the underlying technology. Additionally, case-controlled CRC performance showed a sensitivity of 95% and a specificity of 91% with Stage 1 adjusted sensitivity of 91% in screen-detected individuals. Our pivotal FIND study is now approaching full enrollment. We're on track to complete enrollment in the third quarter of this year with roughly 24,000 average risk adults enrolled to date. Our conversations with the FDA have been productive and are ongoing. We plan to read out the FIND cohort in 2027, and we'll provide additional color on the path from there at that time. Stepping back, we remain very excited about this opportunity. We believe we're developing a genuinely differentiated product, one that from the very beginning was designed around high sensitivity for advanced adenomas, the precursors we most want to catch early. With that, let me hand it back to Mike to walk through the financials. Mike?

Great. Thanks, Alex. The next page is just a summary of the financials compared to last year. I won't belabor all the points that Steve already covered, but there are a few items I want to highlight. The revenue growth over Q2 of last year is particularly notable because you'll recall that Q2 2025 itself was a strong quarter where we put up 20,000 sequential Signatera growth units for the first time. Obviously, the 34,000 unit growth number this quarter shows you we've moved yet again into new territory. You can see positive gross margin trends here year-on-year and organically ex true-ups sequentially versus Q1 despite our rapid cadence of launching new products this year that are not yet optimized for COGS, as Steve described. I was pleased to see loss per share continue to narrow even as we aggressively double down on the future of the business. After ticking upwards last quarter, I was also pleased to see DSOs come down again, roughly 4 days to an average of 57 days this quarter as we continue to do a nice job converting our volumes to cash. On the next slide, I'd like to give more granular detail on our OpEx, particularly in R&D. Given the successful commercial team expansion last year, SG&A is relatively stable in 2026. And obviously, that investment is paying off really well this year. We did have some expenses in the first half on SG&A that are not budgeted to recur in the second half. To the extent we exceed the SG&A guide range this year, I expect the majority of the overage would come from noncash expenses like stock-based compensation charges related to the business hitting long-term incentive targets and litigation expenses. In R&D, we are remaining very ambitious in our core areas of MRD, organ health and women's health. You can easily measure our productivity over time just by reviewing the speed and breadth of the new products we've launched and the clinical trials we've read out over the last few years. Given the speed of our revenue and gross margin growth, however, we can afford to make these investments to remain in pole position while getting scale on the enterprise. As you can see on the chart, while R&D in our core areas is clearly growing, the gross profit dollars are accelerating over and above this growth. What's unique about our current R&D spend is the scale of the investment we are making in early cancer detection this year, which at the moment doesn't yield any top line or margin benefits at all. You can see that visually as the large change on the chart, which represents the roughly $100 million we are spending this year on development work and the FIND ECD trial. We think that ECD has enormous future potential once launched, and we expect a growth wave from 0 currently to millions of tests per year. So we expect the scaling benefits to arrive for that fourth area of the business relatively soon. Okay. Great. Let's wrap up with the guide for the rest of the year on the next slide. We are going to significantly bump the revenue guide now at $2.85 billion to $2.91 billion, which implies roughly 31% annual growth ex true-ups and meaningful growth in the second half over the first half of this year. We feel good about hitting this guide range given the volume and ASP trends in the business, obviously, with Signatera, but also given the better-than-expected seasonal dip we experienced in women's health. For Signatera volume growth assumptions, keep in mind, Q2 sequential volume was exaggerated by several thousand units due to weather negatively impacting us in Q1, as Steve described. So while we had another very strong month in July, we don't expect to set a new volume record again in Q3. We continue to think the right framework for forecasting Signatera growth units is this linear growth model we've described in the past. If you take the average growth in units over the prior 4 quarters, that solves for randomness around weather and any seasonality or receiving day variances over the past year. Overall, the guide is just driven by volume growth and stable ASPs through the balance of the year. On Signatera, we've made a bunch of progress with biomarker state and Medicare Advantage coverage. So I think really to drive ASPs meaningfully higher, I think we are going to need to expand MolDX indication coverage, get some benefit from the bladder NCCN guideline and eventually get guidelines in additional indications. Our approach this entire year has been that those drivers are going to help us in '27. And so we will continue to keep them out of the guide for 2026. The rest of the guide, we're going to hold steady. Gross margins, we bumped 100 basis points last quarter. And what you've seen this quarter is the benefit from ASP improvement and a normalizing test [ reported-to-accessioned ] ratio that was balanced out by a step-up in volumes in the new products, which, as Steve mentioned, we think is a healthy development and sets us up to generate returns from COGS reduction projects next year. We are holding steady on OpEx. We'll keep the same mindset we have to keep our foot on the gas to invest in future growth. If additional high-return projects come our way, we are going to make the investments and update you on the quarterly call. Finally, we are in good shape to generate cash for the year again, which is a priority for us even as we are in growth mode. Okay. With that, let's turn it over to the operator for questions. Operator?

[Operator Instructions] Your first question comes from the line of Puneet Souda with Leerink Partners.

A really impressive quarter for Signatera. So first one, if I could. Steve, you talked about a bit about the drivers. But if you could double-click on that. Clearly, you're building very strong evidence that's playing out. Could you elaborate a little bit on how should we think about how are these increases sort of sustainable? Any color you can provide into '27? And maybe just if you could double-click on the -- what's powering this growth? Is it the sales rep, the commercial execution? Clearly, data is strong. NCCN data readouts. I mean you could say all of those things, but maybe just the principal component that you think is driving this and keeps this sustainable in terms of quarter-over-quarter growth that -- remarkable growth that we're seeing here.

Yes. Thanks for the question. Yes. So I think there's some things that happened this quarter that we think were very beneficial. You look at that FDA approval, certainly, there's some halo effect coming off of that, that was received very positively after the IMvigor readout. But if you take a step back and you look at the preparations that we've made over the last couple of years, we made big investments in the commercial team. We made big investments in medical affairs. We've been investing in large-scale clinical trials and data readouts. So all of those things have put us in a position to now be executing and outperforming. So we're super excited to see the planning that we put in now coming to fruition. But ultimately, we really focus on sort of the 4, 5 core things across all of our businesses. One is like an extreme focus on technology and sort of being on that cutting edge of technology. The second is backing everything with a very significant amount of peer-reviewed evidence. And you can see we've continued to invest in that and continued to extend our lead. And then the third is focus extensively on user experience. We've done a lot of things to implement new ways to reduce TMB issues on tissue to be able to accept more samples, mobile phlebotomy expansion and so forth. And then the fourth is the team, and we have an excellent team of both on the commercial side and the medical affairs side. All of those things have put us in a position to be successful. And as we look forward, obviously, this 34,000 quarter-over-quarter is just a blowout record, I think, compared to anything that we've done previously. But I wouldn't say necessarily we're going to repeat that immediately. But if you look at, I think our previous record was maybe 25,000 quarter-over-quarter or something like that. And I think we can outperform that as we move forward. And Q3 is off to a very good start. So I would expect us to be kind of somewhere right in the middle there.

Got it. And then a follow-up for you. Maybe this is just going a bit deeper into Slide 13. Thanks for providing that. I think it's a very good perspective given the competition questions that we normally receive. Could you maybe dive a little bit deeper into it? Maybe, Alex, if you can talk about it. How should -- this clearly lays out 2027, 2028 readouts that are steadily going to be coming out. But is there any -- are there any specific readouts that you would point to? And maybe if you could just dial a little bit into the ER 101 study, again, sort of how should we think about that? Is that something a practice-changing study? Is that how we should be thinking about that study?

Yes, Alex, go ahead.

Thanks for the question. So I think Slide 13, this is just kind of the prospective portion of our studies, right? So I think on top of this, we still continue to invest and read out biobanks studies as well. So we do expect a large bolus of readouts in the next few years. The way I would kind of think about especially the prospective readouts, I would say there are definitely a few studies that we're kind of monitoring very closely. I think VEGA, for example, a good study that we've discussed in the past. But a lot of these studies are also, I would say, important in smaller indications. And because they are prospective and many of them are now interventional, I think the readouts do have a significant impact in terms of changing care and possibly changing guidelines and reimbursement. So we can't, given the number, provide details on every single study kind of an exact dates for when it will read out. Some of this is variable. Some of this we don't control because some of these are being done with collaborators. But as we kind of get closer and, kind of, enter 2027, we'll try to provide a little bit more guidance about, kind of, the studies that we think are important and a little bit more information about their timing. Kind of going back to ER 101 and the broader SIGNAL portfolio, I think we'll be announcing additional studies as they come online. We're extremely excited about the pipeline. I think the main point is these studies are designed to a high level. I think we said in the prepared remarks, pharma level. And many of them are actually randomized. SIGNAL-ER is not randomized, but it's not randomized because we couldn't randomize it, but because we're actually looking for performance for the ctDNA-negative arm to do so well that really what we're doing is almost comparing to close to 100%. I mean that's how high of a bar we're setting. And if the study is positive, we do believe that this study will be practice changing. And that's the mentality we've taken with every single SIGNAL study that we have designed and plan to initiate in the next few months.

And Puneet, let me just add to that a little bit, too. So basically, what we did is we sort of went across every histology that we thought could make a major impact on the business. And we said, let's design a practice-changing potentially guideline-enabling study, and then we're going to fund those trials. And that's sort of what we've done, and that's why you see a lot of our investment going into these clinical trials. So SIGNAL breast is the first one that we're announcing, but there's going to be a suite across all different histologies. So stay tuned, and it's a big part of our strategy going forward.

Your next question comes from the line of Dan Brennan with TD Cowen.

Congrats on a strong quarter. Maybe could I start just on Signatera volumes again, given how strong it was this quarter. So a couple of thousand tests from the weather recapture here at 32,000. And I guess, Steve, you talked about that sales force expansion productivity, which is just beginning to hit. So I'm just kind of wondering how we should be thinking about the go-forward pace because it sounds like given the size of the sales force expansion that possibly you could see really another couple of quarters here of really significant volume quarter-to-quarter growth based upon -- I mean, these salespeople are probably just getting going with that productivity enhancement?

Yes, I think that's right. I mean we've got these sales folks that have just come online. We made a big investment in medical affairs. We're seeing a lot of momentum coming off the trials that have read out, coming off the halo effect of the FDA approval. There are some things like even in bladder, for example, where the IMvigor protocol is sort of moving to kind of an every 6-week protocol as outlined in the approval. And I think things like that can kind of give us an upside opportunity as well where people may be starting to draw more frequently where they've traditionally drawn, say, quarterly or every 6 months. So there's a lot of momentum right now. And I don't think we'll do 34,000. Obviously, I think here, we've really outperformed even our own internal expectations. But like I said, our previous record, all-time record had been, I think, 25,000. And if we can outperform that, I think that would be a good achievement. And we think we're in a position to be able to do that and kind of continue to notch up as the year goes on. But very strong momentum. I think we're crossing the sort of tipping point in the field where doctors are really starting to believe in MRD as a core part of their practice. And I think we're the major beneficiary of that given the breadth of our presence in the field and the amount of data that we've put out, the size of our sales team. So everything is sort of starting to come together.

Terrific. And then maybe just on the price, the $25 sequential increase ahead of expectations. I think you've had $25 and $22 the last 2 quarters sequentially. But what I'm hearing -- I know Mike talked about more of the benefit in '27, but I heard Solomon say several commercial payers are kind of putting Signatera in their plans. You've got 3 NCCN guideline inclusions. And Steve, you talked about the benefits you had on rev cycle as well that you experienced in transplant and women's health and you're seeing really an opportunity now more so in Signatera. So I'm just wondering if you can unpack that all, is there a chance this price really begins to take off here in the next few quarters more so? Or is $25 sequential still the right way to think about it for a little while?

Yes. Mike, do you want to take that?

Yes. No, thanks for the question. I mean I think that -- so as we mentioned on the prepared remarks, the guide that we put out presumes just stable ASPs, $1,275 for Signatera through the balance of the year. I think if you're looking for like what would be an upside case beyond the guide, which we normally said is something that is difficult but achievable. I think it would be something in that ZIP code of another $25 through the balance of the year. And I can talk a little bit about why. I mean the things that drive immediate-term ASP upside are things that we're basically getting paid on already right now, right? If you think about the timing of the accrual for Q3, we've got to be receiving reimbursement for that unit effectively right now for us to count it in the Q3 results. So that tends to be things that are kind of more tactical in nature. These are things like improving Medicare Advantages compliance with reimbursing for covered services, expanding coverage within the biomarker states, things like that. The things that we're mentioning on the call are the longer-term drivers and will have a bigger impact on ASP. I feel better about the long-term vision for getting to $2,000. I feel better about that now than I really ever have since we launched Signatera 6, 7, 8 years ago. But I think just if you're looking for kind of tactical kind of moves over the next couple of quarters, I mean, I think an upside case would be something like $25 just because these recent wins that we've had take a little while to get into the revenue recognition.

Your next question comes from the line of Dave Westenberg with Piper Sandler.

Congrats on the good MRD numbers. So one of the things I think that was kind of fascinating, we see really good growth in a lot of the different MRD competitors or new entrants. Obviously, it's not having any impact on you with the 50% growth rate. So can you tell us, is there still like market education from some of these competitors? And how do you think as these competitors come in, is there lanes for each? Or is there some crossover? Or do you think maybe they're kind of just getting their own customers? I just want to think about how it plays out as they are on the market, and they do seem to be getting traction at this point.

Yes, that's a good question. I mean there's always going to be competition, and we've seen that. I think if you look at probably 4 years now, maybe 3-plus years, there's been major oncology competitors that have had MRD tests that are approved by MolDX on the market. So it's not necessarily sort of a new dynamic. And you can see we've done really well in the face of competition. I think we're going to continue to do really well because we're doing all the right things. So we're investing in the technology. When we see an opportunity to round out the portfolio or enhance the portfolio, we're taking those opportunities. We're doing all the right clinical studies. So I think we're in a really good spot going forward. I would just say there's always going to be competition and other companies are going to do well. But because it's such a large market, it really doesn't have a significant impact on us. I mean we're still very early in penetration in the overall market. I would sort of say mid-single digits. So we think there's a lot of upside here, and we're really in the best position to capture that upside. Now with that said, we're very keenly watching what everybody else is doing. And if we think there's an opportunity for us to push harder in one particular area or sort of close gaps in a particular area, we're going to be really focused on that.

Great. And you mentioned in your prepared remarks, some of the new patient starts again being extremely high in the gross margin commentary. Now I know you don't give out mix of brand-new patient starts versus continued patients. But can you maybe give some of the mix in terms of tissue types? Are you gaining new -- a lot more new patient starts in some of the covered versus uncovered indications, some of the more newer indications? Just trying to get a flavor of what might be coming down the pipeline in terms of what you're seeing in, say, tissue types in, say, 2028.

Yes, it's a great question. So as you know, we have many tissue types now that are -- or many histologies that are covered by MolDX. And then we have a handful where we still don't have coverage, but we have submissions. And I think we've sort of reported before that we had 7 submissions in -- which are at various stages, and we're excited about the opportunity of getting coverage there. As far as what we're seeing in the field, we're continuing to grow colorectal and breast, which I think are the 2 sort of largest, as we said in the remarks, but there's a lot of opportunity beyond that. And as we turn out new publications, we generate new data, we start to see uptick in these other histologies as well. And we think we're in a really good position to continue to drive growth across the business, both in CRC and breast, but also across this longer tail of other histologies.