GH Q3 Deep Dive: Broad-Based Growth, Screening Momentum, and Margin Improvement

Diagnostics company Guardant Health (NASDAQ:GH) announced better-than-expected revenue in Q3 CY2025, with sales up 38.5% year on year to $265.2 million. The company’s full-year revenue guidance of $967.5 million at the midpoint came in 4.9% above analysts’ estimates. Its non-GAAP loss of $0.39 per share was 20.3% above analysts’ consensus estimates.

Is now the time to buy GH? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Guardant Health’s third quarter was marked by robust revenue growth and a positive market reaction, with outperformance across its main business lines. Management attributed these results to accelerating oncology test volumes, continued adoption of the Guardant360 platform, and the early commercial success of Shield in cancer screening. Co-CEO Helmy Eltoukhy highlighted the company’s ability to deliver “broad-based growth across our business,” citing stronger biopharma partnerships and effective cost controls, particularly in the Reveal and Shield product lines. The company’s progress in expanding its clinical utility and reducing per-test costs contributed meaningfully to margin improvements this quarter.

Looking ahead, Guardant Health’s guidance reflects optimism about sustained volume growth in oncology and screening, driven by ongoing product innovation and commercial expansion. Management emphasized the significance of new strategic partnerships, such as those with Quest Diagnostics and PathGroup, and the potential for guideline inclusion to unlock further reimbursement opportunities. Co-CEO AmirAli Talasaz stated, “We are confident about the long-term outlooks that we shared at our Investor Day,” referencing continued investment in Shield’s commercial infrastructure and ongoing development of multi-cancer detection capabilities as major growth drivers for the company’s future.

Key Insights from Management’s Remarks

Guardant Health’s management credited the quarter’s performance to accelerating adoption of its core oncology and screening products, operational efficiencies, and new strategic collaborations.

• Oncology volume acceleration: Management reported a 40% year-over-year increase in oncology test volumes, driven by expanded clinical applications and the introduction of new Smart apps developed through the Infinity AI platform. The Guardant360 Liquid, Tissue, and Reveal products all saw significant volume increases, with Reveal remaining the fastest-growing oncology product in the portfolio.
• Shield screening momentum: Shield, Guardant’s blood-based colorectal cancer screening test, demonstrated accelerating adoption and revenue growth, supported by high patient adherence rates and strong Medicare reimbursement. Management highlighted that Shield reached an annual revenue run rate of approximately $100 million just a year after its FDA launch.
• Strategic partnerships boost reach: The company announced collaborations with Quest Diagnostics and PathGroup, which are expected to expand Shield’s access to more healthcare providers and patients nationwide. These partnerships are positioned to accelerate Shield’s adoption and enhance Guardant’s market presence in primary care.
• R&D advances and regulatory milestones: The submission of a premarket approval (PMA) application for Guardant360 Liquid to the FDA was a key milestone, potentially streamlining the company’s oncology portfolio and enabling broader adoption. Management also pointed to progress in developing Reveal Ultra, an ultra-sensitive tissue-informed MRD (minimal residual disease) assay, and expanding clinical studies across multiple cancer types.
• Margin improvement through cost management: The company achieved notable reductions in cost of goods sold (COGS) for both Reveal and Shield, with Shield’s non-GAAP gross margin improving to 55%. Management attributed improved margins to operational scale, disciplined cost management, and favorable payer mix, particularly strong Medicare Advantage reimbursement.

Drivers of Future Performance

Management expects continued momentum in oncology and screening volumes, supported by product innovation, expanded commercial infrastructure, and potential guideline inclusion.

• Expansion of strategic partnerships: Collaborations with Quest Diagnostics and PathGroup are expected to significantly broaden Shield’s access, enabling integration with large provider networks and accelerating adoption among primary care physicians. Management believes these partnerships will strengthen the company’s competitive position in the screening market and support future volume growth.
• Ongoing product innovation: The rollout of additional Smart apps on the Guardant360 platform and the upcoming launch of Reveal Ultra are expected to enhance clinical utility and drive higher test utilization. Management views continued investment in R&D and data generation as critical to maintaining technical leadership and broadening applications in both oncology and MRD.
• Reimbursement and guideline milestones: The potential inclusion of Shield in clinical guidelines, particularly by the American Cancer Society, could unlock broader commercial reimbursement and drive adoption. Management is also focused on maintaining favorable Medicare rates and expanding coverage for Reveal in additional cancer indications, which could provide incremental revenue streams and support long-term growth.

Catalysts in Upcoming Quarters

As we look to future quarters, the StockStory team will closely monitor (1) the pace and impact of Shield adoption following the launch of partnerships with Quest Diagnostics and PathGroup, (2) regulatory and reimbursement developments, particularly the potential for guideline inclusion and expanded Medicare coverage, and (3) the rollout of new Smart apps and Reveal Ultra in oncology. Execution on these fronts, along with continued improvements in gross margins and commercial infrastructure, will be key indicators of Guardant Health’s ability to sustain its growth trajectory.

Guardant Health currently trades at $89, up from $72.26 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).

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