Good afternoon, and thank you for joining the Guardant Health Q2 2025 Earnings Conference Call. My name is Jason, and I will be your moderator today. I now hand over the call to your host, Zarak Khurshid.

Thank you. Earlier today, Guardant Health released financial results for the quarter ended June 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 live call over to Helmy.

Thanks, Zarak. Good afternoon, and thank you for joining our second quarter 2025 earnings call. Starting on Slide 3. Q2 marked another exceptional quarter for Guardant. We continue to build momentum across oncology, biopharma, and screening business lines, including accelerating therapy selection and MRD volume growth, record biopharma sales, and quickly scaling Shield volumes and revenues. Product innovation built on Smart Liquid Biopsy combined with strong commercial execution were integral to the strong performance in the second quarter. I'll walk through some of the key highlights of the quarter in just a moment. But first, as always, I would like to start with a powerful story that demonstrates the impact our test can have on patients around the world. Last August, a 46-year-old woman was diagnosed with Stage III endometrial carcinoma. Once it became clear that her cancer was progressing, her oncologists ordered a Guardant360 Tissue test to help identify potential treatment options beyond the standard of care. Guardant360 Tissue had just gone through a major upgrade to incorporate comprehensive DNA and RNA, and oncologists ordered both results. The test identified a RET fusion, an actionable biomarker that made her eligible for a targeted therapy she likely would not have received based on her initial diagnosis alone. I'm glad to be able to share that she has responded positively to this treatment and is doing well today. This case is a powerful example of how comprehensive molecular profiling through our recently upgraded Guardant360 Tissue test can help guide treatment decisions and improve patient outcomes. Turning to top line performance on Slide 4. Q2 revenue grew 31% year-over-year to $232 million with strong performance across our oncology, screening and biopharma and data businesses. Starting with our oncology business on Slide 5. Roughly half of the overall year-over-year revenue growth in Q2 came from the oncology business with revenue increasing 22% to $159 million. Oncology volumes increased 30% year-over-year to approximately 64,000 tests in the second quarter with the majority of growth driven by Guardant360 Liquid, again, closely followed by a strong contribution from Reveal. Looking more closely at some of the recent highlights within our oncology business on Slide 6. We saw continued volume growth across all oncology tests this quarter with particularly strong performance from Guardant360 Liquid, where year-over-year growth accelerated for the fourth consecutive quarter and was over 20% in Q2. We continue to believe that the steady cadence of new app introductions powered by Smart Liquid Biopsy has been instrumental to the accelerating growth profile of Guardant360 Liquid. In late May, as part of the lead-up to ASCO 2025, we introduced 11 groundbreaking Smart Liquid Biopsy applications for Guardant360 Liquid, significantly expanding the clinical utility and further extending our technical leadership in the liquid CGP market. I'll walk through some of these applications in more detail shortly. Guardant360 Tissue continues to be our second fastest-growing oncology product and is even better positioned today to accelerate following the major upgrade in April, which we believe makes it a best-in-class product. As a reminder, the recent improvements expand the panel to include RNA and broad methylome analysis powered by our Smart Liquid Biopsy platform and enable readouts with 40% fewer slides than the industry norm, which we believe is an important differentiator. We are also excited to report for the first time that Guardant360 Tissue ASP was approximately $2,000 in Q2, achieving our 2028 target three years ahead of schedule. For Reveal, we made great progress with data generation and publications. We recently submitted our Reveal breast cancer data package to MolDx for Medicare reimbursement, and the first publication of immuno-oncology therapy monitoring data under Reveal was published this week. In May, we continued to augment our offering with the launches of Guardant Hereditary Cancer testing and a suite of immunohistochemistry or IHC tests. These additions bring us closer to becoming a one-stop shop for oncologists, providing insights across the patient journey. Turning to Slide 7. At the annual ASCO meeting in early June, results from the landmark SERENA-6 trial sponsored by AstraZeneca were featured in a high-profile plenary session. This was the first pivotal trial to use a ctDNA-guided approach to detect and treat emerging resistance in first-line therapy ahead of disease progression in breast cancer. Guardant360 was the exclusive companion liquid biopsy used in the trial for this monitoring application. Feedback from KOLs during and after ASCO was incredibly positive, and we look forward to camizestrant potentially becoming a new option for breast cancer patients. This important new paradigm involving frequent Guardant360 testing in order to quickly detect the emergence of resistance mutations has potential to change clinical practice and improve outcomes for patients with advanced breast cancer. With a prevalence pool of approximately 40,000 patients in the U.S., this new application of Guardant360 has the potential to drive significant incremental Guardant360 revenue in 2026 and beyond. Moving on to Slide 8. We have built a powerful real-world evidence platform utilizing over 100,000 genomic and broad epigenomic profiles across more than 50 cancer types. By combining the multiomic profiling capabilities of our Infinity platform with the analytical power of our Infinity AI learning engine, we are driving the development of first-of-the-kind clinical applications that are setting a new standard in precision oncology. Turning to Slide 9. Since July of last year, Guardant360 has delivered accelerating growth each quarter, fueled by our Guardant Infinity smart liquid biopsy platform. In Q2 alone, we launched nearly a dozen groundbreaking new apps, greatly expanding the utility of Guardant360 Liquid. The latest wave of new apps include complementary genomic features, which add an even higher resolution view of tumor biology, helping health care providers to make smarter, more personalized treatment decisions even when tissue isn't available for analysis. Among the many newly launched applications are: cancer subtype classification using tumor-specific methylation signatures to complement and enhance standard testing methods; cancer site of origin identification when the primary site is unknown, guiding better diagnosis and therapy; advanced negative prediction to confidently identify wild-type patients; and pharmacogenomic profiling to identify genetic variations that impact the safety and efficacy of commonly used anticancer therapies. Now shifting gears to Reveal on Slide 10, where we are the leader in tissue-free MRD. Over the last few months, we have continued to generate and publish compelling data on Reveal across a number of cancer types. As I mentioned earlier, the Reveal breast reimbursement submission has been made to MolDX, and the IO monitoring study just published will support reimbursement submission for this application in the near future. Starting with Slide 11. We are excited to announce a new breast cancer publication in ESMO Open highlighting the performance of Reveal. This retrospective study evaluated 95 patients who are diagnosed with early-stage ER-positive HER2-negative or triple-negative breast cancer undergoing chemotherapy prior to surgery. Notably, nearly 40% of patients had minimal or no residual tumor following neoadjuvant chemotherapy, demonstrating the value of Reveal's tissue-free approach. Reveal showed strong performance with 100% sensitivity for distance recurrence in patients with ER-positive HER2-negative breast cancer, 100% specificity and 100% positive predictive value for relapse and an overall sensitivity of 71%. These results, combined with the data recently published in Clinical Cancer Research, further validate Reveal's potential to transform neoadjuvant and post-treatment surveillance strategies with the ultimate goal of improving patient outcomes. Moving on to Slide 12. I am proud to share the RADIOHEAD Reveal immuno-oncology monitoring study, which involved 521 stage IV pan-cancer patients treated with standard of care immunotherapy, was published in Cancer Research Communications, a journal of the American Association of Cancer Research. This study demonstrated that any decrease in Reveal tumor fraction signal in the study was significantly associated with improved patient outcomes. Additionally, Reveal identified nonresponders more than 3 months and as many as 5 months before disease progression was visible on standard imaging. Turning to Slide 13. At this year's ASCO Annual Meeting, data from the largest study to date using ctDNA in stage III colon cancer further validated the clinical utility of Reveal. This Phase III study involved over 2,000 patients evaluated with a median follow-up of 6.1 years showed that ctDNA detected after surgery and before chemotherapy is a powerful predictor of recurrence and survival. Among patients with detectable ctDNA, 63% experienced recurrence within 3 years compared to just 15% of those without detectable ctDNA. These findings strongly support the routine use of Guardant Reveal to stratify patients by risk, inform adjuvant therapy decisions and ultimately improve outcomes. We have made strong progress over the last few months in MRD. Reveal volume growth accelerated in the second quarter on a year-over-year basis, consistent with our expectations, and we continue to have an extensive pipeline of clinical cohorts to further support clinical utility and analytical validity for Reveal. Turning now to Slide 14. Our oncology business is well positioned for durable growth, supported by continued CGP penetration, favorable ASP dynamics, and international expansion. Guardant360 Liquid and Guardant360 Tissue are seeing increased adoption driven by the recently expanded genomic and epigenomic breadth of our platform, which is unlocking greater clinical utility and driving share gains. With a redoubled commercial focus on Reveal following major COGS improvements in Medicare CRC surveillance reimbursement earlier this year, the business is primed for strong growth in MRD. Looking more closely at some of the recent highlights within our biopharma and data business on Slide 15. We delivered a record quarter for our biopharma business, achieving all-time highs in both volume and revenue with second quarter revenue growing 28% year-over-year. We continue to deepen our relationship with large pharma and signed 2 new companion diagnostic deals in Q2. We continue to have a robust and growing pipeline of partnerships, and near-term revenue visibility remains high. Of note, our biopharma volume mix continues to skew towards methylation analysis on Infinity powered by our Smart Liquid Biopsy platform. With that, I will now turn the call over to AmirAli for an update on screening.

Thanks, Helmy. Moving on to Slide 16. We delivered $15 million of Shield testing revenue in Q2 driven by approximately 16,000 tests. We are pleased to see continued strong traction for Shield in the third full quarter of commercial launch. Shield continues to generate strong enthusiasm from both patients and physicians with high adherence rates that continue to be over 90%, meaning we received blood samples for more than 90% of ordered cases. This demonstrates the simplicity of Shield as a routine blood test for CRC screening that can be implemented into standard PCP care. We also continue to observe strong depth of ordering per physician. Moreover, we've been encouraged with the momentum in sales rep productivity in the field, although it's still early days in our commercial journey and the average tenure of our sales reps is less than 8 months. Given our performance this quarter across revenue, volume and gross margin, we are further accelerating the build-out of our commercial infrastructure and now expect to surpass 250 sales reps by year-end to support this growth as we go to 2026. Moving on to Slide 17. In late May, we were very encouraged to see the National Comprehensive Cancer Network, or NCCN, update its CRC screening guidelines to include Shield. The new NCCN guidelines place Shield in Category 2A, which is the same category recommendation as the other first-line screening modalities. This represents the first national guideline recommendation for Shield and, in our view, paves the way for improved commercial coverage and patient access. This also supports our confidence that Shield will be included in other national CRC screening guidelines in the future. Now turning to Slide 18 to take a closer look at screening highlights for the second quarter 2025. Starting with Shield CRC. As I mentioned earlier, we are very pleased with the high patient adherence, strong depth of ordering per physician and the productivity of our reps in the field. We are also very excited to see Shield is now a guideline-recommended screening test by the NCCN. Along with this strong momentum, Shield was recently named a winner of Fast Company's 2025 World Changing Idea Awards, an award that recognizes innovative companies and projects addressing the world's most urgent challenges. Beyond CRC, we made meaningful progress with Shield multi-cancer detection, MCD, in the second quarter. As a reminder, we presented the clinical validation of Shield MCD test at AACR and ASCO this year. This momentum continued when Shield MCD received breakthrough device designation from the FDA, marking an important milestone for us. Moving on to Slide 21. As a reminder, our goal has always been to detect cancer early when it's most treatable. We developed our Shield assay as a platform capable of multi-cancer detection, with CRC screening representing just the first indication for Shield given it has an established regulatory and reimbursement pathway. While we are encouraged by the strong traction we are seeing for Shield CRC, we are even more excited about broadening the impact of Shield across multiple cancer types. Moving on to Slide 22. In early January, we announced Shield's selection for inclusion in the National Cancer Institute's Vanguard study, which is a 24,000-patient pilot study to evaluate the use of MCD tests. As a reminder, Shield was one of only two technologies selected through a highly competitive process. We are pleased to share the commencement of the NCI Vanguard study just a few weeks ago, and we have already started delivering MCD results to physicians and their patients through this trial. The initiation of this study establishes the clinical and operational readiness for Shield MCD and marks an important milestone for the Shield platform. We are looking forward to broadening access to Shield MCD beyond the scope of the Vanguard study in the near future. Looking ahead, Shield V2 continues to be a very active program for us, and we remain confident about the potential inclusion of Shield in American Cancer Society or ACS guidelines.

Thanks, AmirAli. Turning to Slide 23. I'll now discuss some select financial highlights for the quarter ended June 30, 2025. I'll refer to year-over-year growth rates unless otherwise noted. Second quarter total revenue grew 31% to $232.1 million, driven by strong performance across all our key revenue lines, oncology, biopharma and data and screening. Starting with our oncology business. Oncology revenue grew 22% to $158.7 million primarily driven by another quarter of accelerated volume growth. As a reminder, oncology volume consists of our Guardant360 Liquid and Tissue therapy selection tests and our Reveal and Response monitoring tests. Oncology volume grew 30% to approximately 64,000 tests in Q2, with the majority of growth driven by Guardant360 Liquid, closely followed by a strong contribution from Reveal. Guardant360 Liquid year-over-year volume growth accelerated for the fourth consecutive quarter and was over 20% in Q2. Reveal year-over-year volume growth also accelerated in Q2 and continues to be our fastest-growing oncology product. We also continue to see strong oncology ASPs in Q2. Guardant360 Liquid ASP was in the range of $3,000 to $3,100 in the second quarter of 2025, in line with the prior quarter. Guardant360 Tissue ASP increased to approximately $2,000 in Q2, which means that we have reached our 2028 Tissue ASP target three years ahead of schedule. This has been driven by the increase in Medicare pricing from $3,140 to $3,500 at the start of the year, good progress with commercial payers and incremental reimbursement related to the recently launched tissue RNA feature. We've been very encouraged by the attachment of RNA to our Guardant360 Tissue test, and we want to highlight that we do not count tissue RNA separately from Guardant360 Tissue in our reported volumes. Reveal ASP continues to be in the range of $600 to $700 following Medicare CRC surveillance coverage earlier in the year. Out-of-period revenue was consistent with normal expected levels in Q2 and did not provide a material upside in the quarter. Finally, note that we do not include Guardant Hereditary Cancer testing or IHC volumes in our reported volumes, and we expect minimal revenue contribution from these new offerings throughout 2025. Our biopharma and data business performed incredibly well again in the second quarter with record revenue totaling $56 million, an increase of 28%. Our biopharma pipeline continues to shape up solidly, driven by Guardant Infinity and additional companion diagnostic partnerships signed in the quarter, all of which add to our confidence in both the short-term and long-term business. Finally, we continue to see increasing revenue contribution from Shield with screening revenue totaling $14.8 million in Q2 generated from the 16,000 Shield tests that we reported in the quarter. Turning to Slide 24. We're extremely pleased to report that we are making great progress with Shield non-GAAP gross margin, which increased to 48% in Q2 compared to 18% in Q1 2025 and 2% in Q4 2024. This was driven by continued improvements in both ASP and COGS. Shield ASP was over $900 in Q2, which represents a significant increase over the ASP of approximately $600 in Q1. The main drivers of ASP improvement were the increase to our Medicare rate from $920 to $1,495 following the receipt of ADLT status, which became effective on April 1, and the continued high mix of reimbursable test volume. It should also be noted that the Shield ASP reflects the strong reimbursement that we are receiving from Medicare Advantage payers. Equally pleasing is that Shield non-GAAP cost per test further reduced in Q2 and is now less than $500. This continued improvement is driven by increased Shield volume and the excellent performance of our operations team in maintaining rigorous cost controls and driving efficiency gains. Similar to last quarter, we plan to reinvest the incremental Shield gross profit we generate back into the sales and marketing line to accelerate the screening commercial infrastructure build-out. We continue to be very proud of the financial profile that Shield has demonstrated in such a short period of time. Turning to Slide 25. Our non-GAAP gross profit was $153.8 million, an increase of $47 million or 44% year-over-year. Our non-GAAP gross margin of 66% was above our expectations in the second quarter of 2025 and was a significant improvement compared to 60% in the second quarter of '24. The improvement in gross margin is primarily a result of improved oncology ASPs as well as a significant turnaround in gross margins for Reveal and Shield, which were both gross margin negative in Q2 2024 and which are now both gross margin positive. As we noted last quarter, Reveal cost per test has reduced from over $1,000 in 2024 to less than $500 in 2025. Non-GAAP operating expenses were $215.3 million in the second quarter of 2025, an increase of 20% and in line with our expectations. Both non-GAAP R&D and G&A expenses in the quarter were approximately flat compared to prior year, which reflects the operating leverage that we're achieving throughout the business. Non-GAAP sales and marketing expense increased 45% to $107.8 million in the second quarter of 2025. This increase was due to the ongoing screening commercial build-out as well as continued investment in oncology sales and marketing. Adjusted EBITDA loss was $51.9 million for Q2 2025, an improvement of $10 million compared to a loss of $61.9 million in Q2 2024. We continue to be focused on cash management and reducing our burn in 2025 versus 2024. Q2 2025 free cash flow burn was $65.9 million compared to $99.1 million in the prior year period. We ended the quarter with approximately $735 million in cash, cash equivalents and restricted cash. Moving to Slide 26 for our outlook and assumptions for the full year 2025. We're increasing our full-year 2025 revenue guidance for the second time this year to be in the range of $915 million to $925 million, representing growth of approximately 24% to 25% compared to 2024 and an increase of $35 million compared to our prior range of $880 million to $890 million. We now expect oncology revenue to grow approximately 20% year-over-year in 2025 compared to our prior guidance of 18%. The increase is based on stronger-than-expected Guardant360 Liquid and Reveal volumes in Q2 2025 as well as higher oncology volume now projected for the remainder of the year. For the full year 2025, we now expect total oncology volume to grow greater than 27% versus our prior expectation of greater than 25%. We continue to expect our biopharma and data business to perform well throughout 2025 and now expect mid-teens revenue growth compared to our prior expectation of low double-digit growth. We're also raising our full year 2025 Shield revenue guidance again this quarter to $55 million to $60 million from our prior guidance of $40 million to $45 million. This increase is largely driven by higher volume where we now expect 68,000 to 73,000 tests versus our prior guidance of 52,000 to 58,000 tests. Our Shield revenue guidance assumes an ASP of approximately $800 for the second half of 2025, slightly lower than our Q2 ASP as we anticipate potential changes to the mix of Medicare and commercial pay tests as we scale the business. With the significant improvements to gross margins that we've generated during the first half of the year, we are raising our full-year non-GAAP gross margin guidance to be in the range of 63% to 64% compared to the previous range of 62% to 63%. As we've previously outlined, we plan to reinvest any incremental screening gross profit we generate throughout the year back into the business to accelerate our commercial infrastructure build-out. As a result of improved Shield volume and gross margin, we're increasing our sales and marketing efforts and now expect 2025 non-GAAP operating expenses to be in the range of $840 million to $850 million, representing an 11% to 12% increase compared to 2024. We continue to expect full year non-GAAP R&D and G&A expenses to be relatively flat compared to 2024. Lastly, our commitment to cash burn reduction each year in order to reach company-wide cash flow breakeven in 2028 is unchanged. For full year 2025, we still expect free cash flow burn to be in the range of $225 million to $235 million, an improvement compared to $275 million for 2024. We continue to expect our cash burn in 2025 to consist of approximately $200 million related to screening as we scale our Shield business and maximize our first-mover advantage. Significantly, excluding screening, we continue to expect the remainder of the business to burn approximately $25 million to $35 million during the year and to reach free cash flow breakeven in the fourth quarter of 2025. Moving on to Slide 27. At the start of the year, we outlined an ambitious pipeline of catalysts, and it's a testament to our team's strong execution that we've delivered on nearly all of them just halfway through the year. And finally, turning to Slide 28. We'll be hosting an Investor Day on Wednesday, September 24, in New York City. We look forward to sharing a deeper dive across our business. Please reach out to [email protected] for more information.

Our first question is from Mark Massaro from BTIG.

Congratulations on the strong beat and raise. Helmy, the first one is for you. Clearly, you guys are doing a really great job in G360 Liquid and you've raised the volume guidance for the year. You talked about SERENA-6. And what I'm curious about is, did you see any benefit from the New England Journal publication perhaps in Q2? And can you give us a sense for the likelihood that you can continue to drive the interval of testing in 360 in breast cancer?

Yes. No, thanks for the question. We're happy with the quarter, obviously, and happy with the performance of our core business. I think as we've said, this quarter, we saw something like over 20% growth for G360, which is just fantastic to see this kind of growth, a product that's been in the market for so long. And I think what we're seeing right now is really, I think, a testament to the product market fit we've achieved with our Infinity Smart Liquid Biopsy platform. And I think there's a lot more juice to squeeze. If there was SERENA-6 impact, it was very minimal. This quarter, we think we'd see the majority of that once and if the drug is finally approved. And we obviously are very excited about that in terms of the potential for adding significantly more testing opportunities to the liquid biopsy space. But I think this really, I think, shows how big the CGP liquid biopsy market is. I think we're still in the early innings of converting users to essentially just one test to the first test from a liquid biopsy space. But we have so much room to run, I think, so many years of growth ahead of us as we start getting this sort of monitoring paradigm really kind of fully realized by the market.

Our next question is from Puneet Souda with Leerink.

Congrats on a really strong quarter. If you don't mind, I'll try to squeeze my questions into one. First, Shield growth is obviously very impressive. Can you talk a little bit about what's driving that AmirAli? PCPs among the PCP practices? Is it NCCN? Is it the ramp in the sales force? And wondering if you can give sort of an ASP number, it seems to be higher than the $800 that you had projected. So wondering where that's going to land. And around Shield, if I may also ask, Shield V2 is a big focus for investors. We were hoping for data by now. Any updates on that data? And I'll pause there. I have more questions, but I'll follow up with Helmy later.

Okay. Thanks, Puneet, for the good question. So we are very excited with the Shield commercial performance. We are continuing to see a very strong pull by market. When physicians are becoming aware of this test and they're getting access to this test as we are scaling up our footprint in the field in terms of reps, we are seeing a very strong demand. I think this beat and raise is really an endorsement of a higher productivity that we are seeing in this newly formed sales team that we have kind of assembled. We are very excited about it and looking forward to see what we can do in the second half of the year. Maybe I go to Shield V2 and then I give it to Mike to talk about ASP. As I mentioned in the prepared remarks, V2 is a very active program for us. A lot of work has gone into it and still, it's ongoing, and we'll see what happens. Mike?

Yes. I can add on the ASP that we saw a really good uplift in Shield ASP in the quarter. We went from in Q1, ASP was just over $600. And in Q2, that increased to over $900. And the main driver of that obviously was that the ADLT status became effective on the 1st of April. So our Medicare rate increased from $920 to $1,495. And we're also seeing very strong Medicare Advantage reimbursement that's coming through now from pretty much all of the payers. And so that's helping to really stabilize that ASP. I think when we look at the back half of the year, and we said it in the prepared remarks, we'd expect our ASP for the next 6 months to be around $800. And so that will be slightly lower than Q2. And really, that's a function of the mix. As we continue to scale, we think we'll see more of the mix move from Medicare, Medicare Advantage on to commercial. So we're just allowing for that over the next 6 months. But yes, I think the ASP story on Shield has been really positive for us this quarter.

Our next question is from Dan Brennan with TD Cowen.

Maybe just one on G360 since doing so well and it's your biggest business. Just could you give a little color in terms of kind of where the growth is coming from? Do you feel that you're seeing better penetration maybe locally or big AMCs? Do you feel like it's more just penetration in the existing market? Or do you feel like maybe you're taking share? And then the other factor is Helmy, you discussed a lot of the benefits of Smart Liquid Biopsy in terms of the performance. Is that resonating at the oncologist level? Is that really a sale into the hospital administrator? Just trying to unpack a little bit of your growth versus maybe the other players in the broader market.

Yes, that's a great question. When we look at the numbers, we're experiencing significant growth across the board. More oncologists are ordering every month than ever before. This growth has been especially notable over the past few quarters since the launch of Smart Liquid Biopsy. We've also seen an increase in the average number of 360 tests per month in those same accounts, which is very encouraging. This uptick is due to the increased utilization of the test, as we are expanding the market and use cases for liquid biopsy, while also capturing substantial market share. Moreover, our test has achieved a much better product-market fit than anything else available. These features truly resonate with oncologists; I attended ASCO and found that key opinion leaders and oncologists from academic centers are really excited about these capabilities. These features are also appealing at the community level. For instance, we can provide insights that tissue tests sometimes cannot, such as tracking tumor evolution from a subtype perspective, which is crucial for treatment decisions. We can identify patients who may be eligible for specific drugs, including immunotherapies and PARP inhibitors. This is just the start of what we can achieve. Our pipeline of new applications and upcoming launches is likely even more thrilling than what we've introduced so far. Many of the capabilities we discussed three years ago would have seemed like science fiction to most oncologists and scientists, highlighting the power of our platform. We're beginning to see this reflected in the metrics for both the biopharma and clinical sides.

Our next question is from Tycho Peterson with Jefferies.

On Shield, congrats on the Vanguard enrollment. I'm just wondering if you can walk through kind of next steps to getting Shield marketed as an MCED test. Do you have to wait for data from the ongoing lung study or an interim Vanguard readout? How do you feel about inducement concerns? That seems to be a bit of a debate in the investment community. And then can you maybe just talk to your view on the risk around USPSTF? Obviously, if the whole panel gets replaced, that could throw a monkey wrench.

Yes. So Tycho, we are very excited with this progress we had on the R&D side. Now MCED is clinically validated. So it's clinically validated. We are not waiting for any other test or test to be a clinical-grade test. We spent some energy and effort to make it operationally ready for patient testing. And now that we have started the Vanguard study labs are running these samples. We are reporting out these clinical reports for patient management within the Vanguard. So from those aspects, we are actually ready. It's not that we are waiting for any kind of pivotal study readout to come before we take any action on broadening access for Shield MCED. As I mentioned in the prepared remarks, hopefully, we can have some conversation about it in the near future. And stay tuned about it. In terms of some of the matters you mentioned, we are very aware of the laws. We are here to help the patients. Never we are going to do something which is against the laws. I think the way I read about it is the tremendous opportunity that we have with Shield that excites us. I think just over time, it would increase. USPSTF very quickly. We are monitoring the situation very closely. Yes, it looks like the whole panel appears to be to get into the process to get replaced. The good success that we had with our Shield in the market right now with a very healthy gross margin and a very big greenfield, which is in front of us. We have a lot of actually opportunity in front of us to mine, build this business while we are waiting for task force guideline inclusion.

Our next question is from Subbu Nambi with Guggenheim.

You had recently said that Reveal was at approximately 1.7 tests per patient. How much do you expect the CRC surveillance reimbursement to drive this number upwards in the near term in 2026? And then in the long run, what do you think this number could look like? And I noticed in the catalyst slide, you don't have Reveal ADLT listed. I don't think that was on the slide before, but I'm curious if you have any updates there.

Yes, that's a good question. We're already seeing improvements due to some of the progress we've made. Reveal is our fastest-growing product in oncology, second only to Shield across the entire company. We're excited about the advancements we've achieved and the acceleration we're experiencing, particularly with new patient starts and even more with subsequent draws, an area we hadn't emphasized as much before. Now that we've activated much of that strategy, it's rewarding to see how much we can increase our volume. We're optimistic about the next few quarters and especially into 2026 for Reveal, and we believe we can significantly increase the number of tests per patient. Regarding ADLT, that was listed on the milestone chart; we have submitted for it and are currently awaiting a decision. We expect to know the outcome in the next quarter or so and are optimistic since we know the test qualifies for ADLT.

Our next question is from Kyle Mikson with Canaccord.

Congrats on a great quarter. Help me, why are you confident that Reveal Medicare reimbursement for breast is going to be obtained faster than CRC, including surveillance for colon that took a while. And then second for AmirAli, NCCN inclusion was nice, but is that having an impact on Shield volumes? Or do we need ACS and USPSTF? And then on the point of USPSTF from earlier, if the panel is replaced with people that clinicians don't really trust, is this going to make that milestone for you guys maybe less important?

We have received many inquiries. Regarding Reveal Medicare coverage, the second time we applied for CRC surveillance was actually quite quick, taking about 4 to 5 months. That is relatively fast for a coverage submission. The initial application took longer, but we have gained a better understanding of what is required from Medicare now. Ultimately, it is their discretion regarding what is approved. However, having gone through the process several times has given us more clarity. We are quite confident about submitting IO to MolDX, and we are also making good progress on other cohorts with Reveal. This represents an exciting pipeline for us.

Regarding the NCCN guideline, it was definitely a surprise and a significant milestone for us. Assessing how much it affects our volume within this strong ramp we are experiencing is challenging, as it is hard to quantify the impact of each of these catalysts. However, the NCCN represents the opinions of expert oncologists, and we are very excited about it. We also have strong confidence in inclusion by other guidelines, such as ACS and USPSTF. Some aspects are just common sense; if we detect nearly all Stage II and above colorectal cancers, we can cure them or provide long-term survival, even with Stage II detections. It is concerning when patients remain unscreened and do not have their cancer detected. While we will continue to evaluate this over time, we are confident about guideline inclusion.

Our next question is from Dan Arias with Stifel.

AmirAli, you were sufficiently vague on that answer to V2 data timing. Is everything squared away on your end and it's just a matter of when you decide to pull back the curtain on the results? Or are there still things that are being worked on there? Sorry to ask again, but hot topic to say the least.

No problem, I understand. We are not specifying the exact timing of the V2 data. As I mentioned, it’s a very active program, and a lot of work has gone into it and is currently underway. We are not feeling rushed to reach this milestone, partly due to the commercial success we are experiencing with the currently approved product, the V1. This allows us to balance some of our R&D initiatives, such as the MCED clinical validation, and establish operational capabilities for patient reporting, which could create future opportunities. We are continuing to work extensively on the V2, and a lot of progress is being made.

Our next question is from Patrick Donnelly with Citi.

Maybe one just on the profitability side. Nice to see the gross margins continue to creep higher with the profitability side. As you guys have advertised in the last couple of quarters, you're going to continue to invest that on the sales and marketing side. I mean, Mike, does that speak to just your confidence in the path to real profitability here in the out years, the fact that you are willing to continue to reinvest rather than chase near-term profitability. Can you just talk about the confidence in the balance sheet and again, that path to profitability as you reinvest some of these profit dollars?

Yes, Patrick. Looking at the bigger picture, during our last Investor Day two years ago, we outlined our goal to achieve profitability by 2028, and noted that starting in 2023, we would be reducing our cash burn annually. So far, we are well on track with that. Everything is progressing positively, and we are confident in reaching breakeven by 2028. Regarding screening, we have consistently stated that over the next couple of years, we will keep our burn around $200 million and be strategic with reinvesting any additional gross profit into sales and margins. We actually exceeded expectations in gross profit for Q2 with a 48% margin. We're reinvesting that profit without exceeding our targeted burn for the year. This $200 million burn is providing us with everything necessary to scale our commercial infrastructure effectively. Excluding screening, we are making excellent progress; earlier this year, we stated that the rest of the business is set to be breakeven before year-end, and that remains true. Given the traction we are experiencing with average selling prices and better-than-expected gross margins, we feel very confident about this. From a balance sheet standpoint, we continue to be confident and on track regarding our path to profitability as we reinvest some of these profits.

Our next question is from Rachel Vatnsdal with JPMorgan.

I wanted to press on Shield V2 a little bit more, but more so around the time lines associated with it. So you previously had talked about hoping to get that launched by year-end. Not really committing to time lines in terms of when we'll see that data. But just given we don't have it yet, can you walk us through your updated assumptions on how long do you think it will take for FDA to review once they do have the data? And are you still on track to launch that by year-end at this point?

Yes. So I'm not sure how much I can add. But in terms of, yes, the timelines for FDA approval and launch, obviously, it's a function of when we get to the readout and how long it would take FDA to review our package. So we're pleased with a bunch of conversations we had with the agency in terms of what they're going to look at and how they're going to look at. Now how long it's going to take to go through that review process, we have to see how long their process would take. But yes, in terms of end of the year, maybe that's fair. Maybe we are delayed a little bit. But as I mentioned, I don't feel rushed to get to that milestone, and it was important for us to balance some of our R&D activities between V2 and MCED, and I'm very pleased with where we are today. We are working on it very extensively, a lot of work is happening.

Our next question is from Eve Burstein with Bernstein Research.

A couple on Shield. So now that Shield has had ADLT status for 4 months, you're through a chunk of the time that you have to get private payers to contract with you. So first, can you give us some color on how those conversations are progressing? I imagine that many private payers don't want to reimburse a test that won't get them quality credit yet. So how are you handling that? Second, do you expect to contract with private payers at or close to the ADLT rate? Or is the $920 rate more reasonable? Or do you expect it to be below that? And then third, you've given us a guide to ASP of $800 but for the rest of the year. But how should we think about what happens to ASP next year? Could it actually decrease pretty meaningfully as that rate resets and as the payer mix shifts up a bit?

In terms of conversation with private payers, we've been in touch with them. Even after NCCN guideline, we've been in touch with a fraction of commercial payers that we think maybe they would be early adopters. We'll see what happens. We are not counting on any major coverage before getting into ACS and USPSTF guidelines. So we'll see how it goes. In terms of expectation for ADLT rate based on the collections that we are having from Medicare Advantage, we are very confident of keeping our ADLT as what it is today as we go through the next reporting cycle, which is going to start from January of '26 till December of '27. So that $14.95, we are very confident it would remain the same. In terms of ASP, I think it's going to be a function of the payer mix. I think still we are in the early innings of this commercial execution. We are pleased with how the payer mix is landing at this time, but we are going to monitor it, and then we would set expectations for ASP as we get closer to 2026.

Our next question is from Bill Bonello with Craig-Hallum.

I guess this one is for Helmy, maybe more big picture. Thinking about the traction that you've gotten with Guardant360 Liquid and the paradigm shift from years ago sort of tissue first to the big ramp you've had and the evolution towards people being willing to consider liquid first or looking at doing both. I'm just kind of curious how you might extrapolate that experience to Reveal and sort of this notion that seems to be out there that gosh, there's some superiority to tumor-informed and like tissue or tumor naive is fine if you can't get a tissue, but otherwise, you want to do tumor-informed. Could you see sort of a similar evolution? Are you hearing anything from physicians, KOLs in particular now that leads you to believe that will happen?

Yes. that's a great question. I think that maybe one of the sort of underappreciated aspects of our Infinity platform, the sort of Smart Liquid Biopsy ecosystem is that many of these apps that we're populating on 360 Liquid will eventually make their way to 360 Tissue and even Reveal where appropriate. When you think of where Reveal could be, it's going to look like a very different sort of product than any tumor-informed product out there that is just looking for sort of passenger mutations or a number of mutations that may not be actionable. We're actually seeing the biology that is there in that individual, things like the subtype, how that's evolving, the potentially even toxicity from some of the adjuvant therapy that they're being exposed to. It really opens up a different space, which is why we've said that the MRD market will likely have two aspects to it. There will be a tumor-informed sort of market that some physicians would like to use. There's going to be, I think, a pretty massive tissue-free aspect to it in the market too. Just like there is in comprehensive genomic profiling, there are two big markets there. I would argue that the liquid market in CGP, I think few would argue is ultimately going to be massively bigger than the tissue market. We potentially see the same dynamic shaping up on the MRD side.

Our next question is from Yuko Oku with Morgan Stanley.

The recent SERENA-6 readout provides a compelling argument to monitor emergence of ESR mutation for treatment with camizestrant. What do you think may be the split at steady state to monitor emergence of ESR1 mutation between comprehensive panel like G360 versus hotspot tests? And also with cuts to Medicaid, what is your view on the impact to cancer testing more broadly?

Yes. We see this as the starting point for a new approach in oncology that will ultimately become the standard for how all patients are monitored and treated. ESR1 is the first of what we expect will be many chances to switch therapies dynamically, reflecting the idea of adaptive disease management. In the case of camizestrant, we are the enrolling assay. If it receives approval, we will serve as the official companion diagnostic in the United States. We believe we have a strong opportunity not only to pave the way for this new approach but also to take advantage of a significant amount of the potential volume in the early years. We view this as a substantial upside opportunity for G360 volumes in the future.

One more question, please, operator. That concludes the conference call. Thank you for your participation. Enjoy the rest of your day.