Impressive Financial Performance in Q4 2024
Guardant Health (NASDAQ:GH) reported a record revenue of $202 million for Q4 2024, marking a 30% year-over-year increase. The company’s total revenue for 2024 reached $739 million, a robust 31% growth compared to the previous year. This surge was fueled by strong clinical revenue and a notable rise in Guardant360 test volumes.
Co-CEO Helmy Eltoukhy emphasized key milestones, particularly the transition of Guardant360 to the Smart Liquid Biopsy platform, which has enhanced sensitivity tenfold and expanded gene analysis capabilities. This innovation is expected to drive accelerated volume growth in 2025.
Shield and Medicare Pricing Milestones
Co-CEO AmirAli Talasaz highlighted the performance of Shield, which completed its first full quarter of commercial availability, generating $4.1 million in revenue with breakeven gross margins. The Centers for Medicare & Medicaid Services (CMS) set Shield’s pricing at $920, with the potential for an increase to $1,495 upon achieving Advanced Diagnostic Laboratory Test (ADLT) status.
CFO Mike Bell reported an adjusted EBITDA loss of $258 million for 2024, reflecting an $86 million improvement over 2023, driven by efficiency gains and revenue growth.
2025 Outlook: Strong Growth Projections
Management guided 2025 revenue between $850 million and $860 million, reflecting a 15%-16% increase. When adjusted for non-recurring 2024 revenue, the projected growth rises to 19%-20%.
Key growth drivers include:
- 25% oncology volume growth supported by Guardant360 upgrades and CRC surveillance reimbursement for Reveal.
- Shield testing revenue expected to reach $25 million to $30 million, with 45,000 to 50,000 tests projected for 2025.
- Non-GAAP operating expenses expected to range between $815 million and $825 million, reflecting increased investments in Shield’s commercial expansion.
Q4 2024 Financial Highlights
- Clinical test volumes surged 24% year-over-year, reaching 57,300.
- Precision Oncology revenue totaled $185 million, supported by strong biopharma partnerships and improved Guardant360 average selling prices (ASP) of $3,000.
- Full-year 2024 free cash flow burn improved by $70 million to $275 million.
- The company ended 2024 with a strong cash balance of $944 million.
Analyst Q&A: Focus on Shield’s Growth and Reveal’s Adoption
- Puneet Souda, Leerink Partners, inquired about Shield’s sales force expansion and Reveal’s adoption following NCCN guideline updates. Talasaz confirmed that Shield’s sales team doubled to 100 reps by year-end 2024, with further expansions planned for 2025.
- Tejas Savant, Morgan Stanley, questioned Shield ASP assumptions and the potential impact of ADLT status. Talasaz expressed confidence in achieving ADLT designation, which would further bolster Shield’s ASP.
- Dan Brennan, TD Cowen, asked about Reveal’s volume growth and potential new indications. Eltoukhy noted that Reveal volumes are expected to accelerate in 2025, with breast cancer and therapy monitoring indications likely expanding in the second half of the year.
Industry Sentiment: Cautious Optimism
Analysts showed guarded optimism, particularly around Shield’s commercial execution and ASP trajectory. While management emphasized strong momentum in Guardant360 and Shield, analysts raised concerns over reimbursement timelines and ASP sustainability.
Compared to the previous quarter, management confidence increased, citing Shield’s early successes and Guardant360’s continued strength. However, some defensive responses were noted in the Q&A, particularly around Reveal’s adoption hurdles and Shield’s ASP uncertainty.
Key Risks and Challenges
- Potential delays in ADLT designation for Shield could impact ASP growth.
- Slow adoption of Reveal due to mixed NCCN recommendations.
- International expansion challenges, particularly in Japan, where liquid biopsy reimbursement remains limited.
Poised for Strong 2025 Growth
Guardant Health’s Q4 2024 performance underscores strong momentum in oncology and screening segments, supported by groundbreaking technology advancements and improving financial efficiency. With Shield’s commercial expansion, reimbursement tailwinds for Reveal, and continued growth in Guardant360, the company is well-positioned for sustained success in 2025.
