Conference Transcript - GH 2026-06-02

Andrew Brackman, Analyst — William Blair

Good morning. Thanks for joining us here at the William Blair Growth Stock Conference. For those of you who don't know me, my name is Andrew Brackman. I lead the Diagnostics Equity Research Team here at William Blair. This is our first presentation from our coverage list at the conference this week, and we're starting off with our top pick for the year, which is Garden Health. Joining us from the team is Mike Bell, the CFO, and Zarek from Investor Relations is also somewhere here in the room as well, in the back. Just in terms of format here, we'll go through a presentation for about 20, 30 minutes, and then we'll head up to the Adler room for the breakout following that. Lastly, for a full list of research disclosures, please visit williamblair.com. With that, I'll turn it over to Mike.

Mike Bell, CFO

Good morning, everybody. Thanks, Andrew. Thanks, William Blair, for hosting us. I'll wait for the slides to come up. Yeah, before we begin, please note the forward-looking statement disclosures on this slide. Okay, so starting, so, you know, everything we do at GARDEN starts with this mission, to guard wellness and to give every person more time free from disease. We began more than a decade ago pioneering blood-based testing for cancer therapy selection. Since then, we've expanded across the cancer journey into recurrence monitoring and now screening. Today, we've tested more than 1 million patients, built deep relationships with oncologists and primary care physicians, and invested heavily in a platform that turns data into clinically actionable insights, establishing GARDENT as the leader in liquid biopsy. This slide shows our product portfolio spanning the continuum of cancer care. In screening and early detection, SHIELD is designed to identify cancer earlier when it's most treatable. In early-stage disease, Garden Reveal helps clinicians monitor minimal residual disease and detect cancer recurrence. In late-stage cancer care, Garden 360 Liquid, Tissue and Reveal support therapy selection and monitoring. Our product portfolio is powered by our smart platform, which goes far beyond genomics to unlock multimodal biology with proprietary chemistry and advanced algorithms, utilizing our Infinity AI learning engine. This platform is key to our innovation, differentiated product portfolio and robust pipeline of future growth drivers. This slide shows how our innovation has translated into accelerating revenue growth. From 2021 through 2025, revenue increased from $334 million to $982 million. At the midpoint of our May 7th guidance, we expect revenue of $1.31 billion this year, representing another year of strong growth, roughly 33%. We now have multiple growth engines working at the same time. Oncology continues to accelerate, our biopharma and data business is becoming more strategically valuable, and Shield is scaling rapidly in CRC screening. Q1 is a great example of the broad-based strength across our business. We delivered $302 million revenue in the first quarter. That was up 48% year-over-year from $203 million. That represents our fastest year-over-year percentage revenue growth in the last five years, and it pushed us past the $1 billion trailing 12-month revenue milestone. Over the next few slides, I'll walk through our oncology, biopharma and data, and screening businesses and highlight how each one of them is contributing to the overall growth of the company. I'll start with oncology first this remains a key growth pillar for garden and continues to be under penetrated in late-stage cancer we estimate there are roughly 1 million patients in the US which represents a 10 billion dollar addressable market for therapy selection here a garden 360 leads the market and continues to gain share for a combination of product innovation and commercial execution in addition garden 360 tissue and reveal therapy monitoring puts us in a leading position as the field moves towards multiple tests per patient. In early-stage disease, there are roughly 18 million cancer patients and survivors in the U.S., representing a $20 billion opportunity for MRD and recurrence monitoring, with Guard and Reveal established as the leading tissue-free solution in the space. Liquid biopsy adoption is still expanding, and the role of testing is becoming broader as the power of our products grow. the strong momentum in oncology was very clear in our Q1 results oncology revenue increased 36% year over year to 205 million dollars oncology volume increased 47% to 86,000 tests this volume growth it was the highest year over year percentage growth in oncology volume that we've seen in nearly three years this this slide lays out the drivers of oncology momentum which is broad braced across all of our products over the last several quarters oncology volume has accelerated driven by a steady cadence of product catalysts firstly at the smart platform upgrade expanded the capabilities of our therapy selection products and multiple waves of smart apps have continued to improve the clinical utility of garden 360 liquid through multiple upgrades garden 360 tissue is now best-in-class product and for reveal CRC reimbursement CRC surveillance reimbursement help drive adoption and the launch into therapy monitoring opened a new use case for reveal now excuse me with the smart platform we built a repeatable innovation engine across garden 360 liquid tissue reveal the smart platform is expanding clinical utility improving economics and creating more reasons for oncologists to use garden across the cancer journey with garden at 360 liquid smart apps at epigenomic insight on top of a large genomic panel with Garnet 360 tissue the platform upgrade requires significantly less tissue for analysis and we've recently added whole transcriptome analysis and with reveal the smart platform has delivered a 50 percent reduction in COGS since 2024 and enabled us to launch a new late stage therapy monitoring product in summary innovation is translating into broader use cases stronger product differentiation and durable oncology growth now looking forward the recent FDA approval of garden 360 liquid CDX is an important clinical and commercial milestone it makes garden 360 liquid CDX the most comprehensive FDA approved liquid biopsy for therapy selection it also streamlines our therapy selection portfolio and strengthens the connectivity between Garden360 liquid and Garden360 tissue. In addition, the FDA approval provides additional validation for physicians, patients, payers, and biopharma partners. And finally, from a financial perspective, it also creates a potential pathway for improved Medicare reimbursement through ADLT designation. In MRD, the launch of Reveal Ultra coming later this year is will expand it will expand our best-in-class portfolio today garden reveal is the leading tissue free MRD solution reveal ultra will add a tissue informed option that leverages breakthroughs from both our liquid and tissue platforms it's designed to achieve what we believe is the best-in-class sensitivity with a limit of detection below one part per million while delivering results rapidly and reliably even from challenging tissue biopsy samples. The launch of Reveal Ultra matters because MRD is not a one-size-fits-all market. Some clinical situations benefit from a tissue-free workflow. Others may require ultra-sensitive, tissue-informed performance. With Reveal and Reveal Ultra, we'll be able to serve both needs. The Reveal Ultra launch was going to strengthen our competitive position in MRD and expand our ability to participate in one of the largest opportunities in oncology. Turning now to our biopharma and data business, this is an industry-leading platform with a total addressable market of more than three billion dollars. The business delivered 210 million revenue in 2025 and serves biopharma customers across sample testing, companion diagnostics, clinical development and data products, giving our biopharma partners access to differentiated biological insights and real-world evidence. This slide highlights the value of our biopharma and data business. We now have 26 companion diagnostic approvals and have more than 200 lifetime biopharma partners, including 19 of the top 20 pharma companies. Strategically, the benefits are significant. The business delivers strong gross margins and positive free cash flow. Pharma partnerships fuel product innovation. Companion diagnostic approvals help drive clinical volume. Our global footprint supports international expansion and the data generated through these relationships bolsters our Infinity AI engine. It also reinforces our clinical business and deepens our relationships with the companies developing the next generation of oncology therapies. Now turning to screening, which is one of the largest opportunities in healthcare. SHIELD is the only FDA-approved, Medico-reimbursed, guideline-recommended test for colorectal cancer screening. Just over one and a half years into commercialization, we're still in the very early stages of penetrating a largely unaddressed market. The opportunity is significant with a $50 billion CRC screening market and more than 50 million unscreened patients in the US alone. The commercial trajectory for SHIELD has been very encouraging and SHIELD is proving to be the most successful diagnostic launch in history outside of COVID testing. In the first full year of launch in 2025, Screening revenue was $80 million, and based on the midpoint of the guidance we gave on May the 7th, we expect approximately $192 million revenue in 2026. In Q1 2026, SHIELD revenue was $42 million, and that's compared to $6 million in Q1 of 2025. This rapid quarter-over-quarter growth has continued to build as we move from FDA approval and Medicare coverage to ADLT pricing, NCCN guideline inclusion, and broader commercial reach through collaborations with PATH Group and Quest. The milestones have continued in Q2. Just last week, SHIELD was included in the American Cancer Society guidelines. I'll speak more about that in a moment. Consumer awareness, it's an important part of the screening market, and we took major steps forward in Q1. Our direct-to-consumer campaign spanned TV, digital, influence, and social channels, including our national campaign with Patrick Dempsey during Colorectal Cancer Awareness Month. the goal is to educate consumers drive awareness of blood-based screening and encourage patient initiated conversations with healthcare providers the early response to this has been very strong and meaningful with consumer engagement and increased awareness over time we believe this can support demand generation and physician adoption our collaboration with quest is another major piece in the access strategy it gives shield access to quest national sales team more than 650,000 EMR-connected healthcare providers and more than 8,000 patient access points. This reduces friction in two important ways. For providers, SHIELD can be ordered and results can be received through the workflows they already use. For patients, the Quest network expands convenient access to blood draw locations. It's still very early days, but we're already seeing Quest open the doors to health system and physician practices where we didn't previously have the same direct presence. Guideline and quality measures are central to broad screening adoption and we've made great progress to date. In June of last year, SHIELD was included in NCCN guidelines, reflecting the recommendation of expert oncologists. And just last week, the American Cancer Society guideline inclusion created another very important milestone. This inclusion can help support state-level mandates, accelerate insurance coverage for patients and increased adoption by healthcare providers. Looking ahead, USPSTF guideline inclusion and quality score inclusion are important catalysts for widespread adoption in the 2027-2028 timeframe. Our goal has always been to detect many cancer types early when they're most treatable. We started with CRC because it has a larger met need, a clear clinical pathway and an established reimbursement framework. But from the beginning, the platform was built to detect multi-cancer types early. Now when shield is ordered for CRC screening the physician can opt in to receive multi-cancer detection results and the patient authorizes the release of medical data. The multi-cancer report includes findings across nine additional cancer types beyond CRC. We're encouraged today by the HCPM patient response to this data collection initiative and the strong opt-in that we're seeing. As a result we believe we're building what will quickly become the largest clinical database of multi-cancer detection outcomes from US patients. In addition to our real-world data collection initiative, SHIELD was selected for inclusion in the NCI Vanguard study to evaluate emerging technologies for multi-cancer detection. Across the tumor types shown here, SHIELD demonstrated strong performance with 75% overall sensitivity, 99% specificity, and 92% cancer site of origin accuracy. This is a very important attribute to guide physicians on the appropriate diagnostic workup. These data reinforce our confidence that S.H.I.E.L.D. can evolve into a broader early detection platform over time. Turning now to the financials, our Q1 execution gave us confidence in the full-year outlook we provided on May 7. We raised total revenue guidance to $1.30 to $1.32 billion, representing 32% to 34% year-over-year growth, with strong growth across all areas of our business. At the same time, we're investing aggressively behind growth, while continuing to improve the underlying financial profile of the business. A major highlight is that we continue to make very good progress improving gross margins across our products through ASP optimization, workflow efficiencies, transition to Nova Seek X, and discipline cost management. Looking beyond 2026, we remain confident in achieving the LRP target of 2.2 billion revenue in 2028, which is the guidance that we communicated at our investor day in September 2025. That target represents a compound annual growth rate from 25 to 28 of greater than 30%. It's worth noting that the recent FDA approval of GARDEN 360 liquid CDX creates potential upside to the $2.2 billion target if we achieve improved Medicare pricing through ADLT designation. We're also making significant progress on the path to positive free cash flow. Free cash flow burn has improved each year since 2023 and we expect free cash flow burn approximately 185 295 million dollars this year importantly excluding screening where we were investing to rapidly build out the commercial infrastructure the rest of the garden business is on track to deliver positive free cash flow in the full year of 2026 and we continue to be confident of achieving company-wide free cash flow break-even in the fourth quarter of 2027 we ended q1 with approximately 1.2 billion of cash and our balance sheet is strong following the November financing and convertible restructuring that we did and this gives us flexibility to continue investing behind shield growth while the rest of the business becomes increasingly cash generative key takeaways we're delivering scale today as mentioned during our q1 earnings we expect 2026 sales to be over 1.3 billion dollars and that we will deliver durable annual growth of over 30% through 2028. We're also accelerating innovation across the cancer continuum with multiple catalysts across therapy selection, MRD, and screening, with growth coming from multiple engines. SHIELD is a great example. It's addressing a $50 billion colorectal cancer screening market, and excluding COVID testing, we view it as the best diagnostic launch in history based on revenue. At the same time, we're showing real financial discipline and remain solidly on track for free cash flow breakeven in 2027. The final takeaway is that Gordon offers a rare combination of large markets, platform innovation, strong execution and improving profitability. With that, I'll say thank you and hand it back to Andrew.