Natera — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues reached $794.0 million in Q3 2026, a 34.1% increase year-over-year from $592.2 million in Q3 2025.
• Gross margin was 64.7% in Q3 2026, compared to 64.9% in Q3 2025; non-GAAP gross margin increased by 137 basis points sequentially from Q2 2026 when excluding revenue true-ups.
• Gross profit was $513.5 million in Q3 2026 versus $384.4 million in Q3 2025.
• Total operating expenses were $576.1 million in Q3 2026, up 19.5% from $482.0 million in Q3 2025, driven by headcount growth and clinical trial expenses.
• Loss from operations narrowed to $68.3 million in Q3 2026 from $97.6 million in Q3 2025.
• Net loss was $59.9 million ($0.42 per diluted share) in Q3 2026, compared to $87.5 million ($0.64 per diluted share) in Q3 2025.
• Cash, cash equivalents, and restricted cash totaled $1,097.2 million as of September 30, 2026, an increase of approximately $5.7 million from June 30, 2026.
• Total outstanding debt was $80.3 million as of September 30, 2026.
• Deferred revenue increased to $52.4 million (current and long-term combined) as of September 30, 2026, from $41.9 million as of December 31, 2025.

Guidance and Future Outlook:

• Raised 2026 annual revenue guidance midpoint by $140 million to a range of $3.005 billion to $3.035 billion (previously $2.850 billion to $2.910 billion).
• Full-year 2026 gross margin guidance is approximately 64% to 66%.
• Full-year 2026 selling, general and administrative costs are projected between $1.225 billion and $1.300 billion.
• Full-year 2026 research and development costs are projected between $825 million and $925 million.
• Management anticipates positive cash flow for the full year 2026.

Business Segments and Product Lines:

• Total tests processed increased 22.3% to approximately 1,093,100 in Q3 2026 from 893,600 in Q3 2025.
• Oncology tests processed increased 60.9% to approximately 339,500 in Q3 2026 from 211,000 in Q3 2025.
• Clinical molecular residual disease (MRD) oncology units grew by 32,700 units over the second quarter of 2026.
• Revenue growth was driven by increases in test volume and average selling price improvements.
• Revenue recognition on reported tests increased 23.0% to approximately 1,024,800 tests in Q3 2026 from 832,900 in Q3 2025.

Market and Competitive Landscape:

• Natera operates as a global leader in cell-free DNA and precision medicine across oncology, women's health, and organ health.
• The company's tests are supported by more than 400 peer-reviewed publications.
• The press release notes the company operates in a very competitive and rapidly changing environment with emerging risks.

Risks and Challenges:

• The company faces risks related to the inability to increase product adoption, potential net losses continuing for the foreseeable future, and quarterly result fluctuations.
• Risks include potential failure to compete successfully, product liability claims, and challenges in maintaining third-party payer coverage and reimbursement.
• Operational risks include reliance on limited suppliers, potential laboratory inoperability, and regulatory compliance costs.
• Intellectual property litigation and the inability to protect proprietary technology are cited as potential threats to competitive position.

Management Commentary and Tone:

• Management highlighted continued progress in reducing cost of revenues and the accumulation of historical collection experience, which has resulted in revenue estimates more closely approximating cash collections.
• The increase in operating expenses was attributed to headcount growth to support new product offerings and increases in clinical trial expenses.
• The tone reflects confidence in the ability to scale operations and achieve positive cash flow in 2026.

Other Key Points:

• Weighted average shares outstanding increased to 144.1 million in Q3 2026 from 137.2 million in Q3 2025.
• Accounts receivable increased to $471.4 million as of September 30, 2026, from $296.5 million as of December 31, 2025.
• Inventory increased to $91.7 million as of September 30, 2026, from $68.4 million as of December 31, 2025.
• Property and equipment, net, increased to $354.0 million as of September 30, 2026, from $241.2 million as of December 31, 2025.
• Amortization of acquired intangible assets was $5.7 million in Q3 2026, with no such amortization in Q3 2025.
• Changes in estimates increased gross margin by 1.5% in Q3 2026 compared to 3.6% in Q3 2025.