Garden Health (GH) Q1 2025: Oncology Volume Surges 25% as Reveal and SHIELD Turn Gross Margin Positive
Garden Health unlocked a pivotal quarter with both Reveal and SHIELD crossing into positive gross margin territory, while oncology test volumes accelerated for a third straight quarter. Robust reimbursement wins, cost discipline, and product upgrades fueled the company’s confidence to raise full-year revenue guidance and double down on commercial investments. Management’s push into multi-cancer detection and tissue innovation signals a high-stakes bid for broader market share and durable growth, but investor focus should remain on execution and cash burn as the company scales.
Summary
- Margin Inflection Across Key Products: Reveal and SHIELD both achieved gross margin positivity, supporting scale-up and cash burn improvement.
- Oncology Volume Acceleration: Garden360 and Reveal drove 25% test growth, marking a third consecutive quarter of acceleration.
- Strategic Expansion Bets: Raised guidance and commercial investments set the stage for broader market capture, but execution risk remains high.
Performance Analysis
Garden Health delivered 21% year-over-year revenue growth, reaching $203 million in Q1, with oncology as the primary engine. Oncology revenue grew 20% to $151 million, accounting for nearly three-quarters of total sales, and test volumes climbed 25% to approximately 59,000, led by Garden360 and Reveal. The company’s biopharma and data segment contributed $45 million, also growing 21%, while screening revenue from SHIELD reached $5.7 million on 9,000 tests, showing early traction in its second full commercial quarter.
Margin improvement was a highlight: Reveal’s cost per test dropped over 50% to below $500, enabling its first positive gross margin, while SHIELD also turned gross margin positive with a $600 average selling price (ASP) and continued cost reduction. Non-GAAP gross margin reached 65%, above expectations, while operating expenses rose 13% as sales and marketing investments ramped up to support screening and oncology growth. Adjusted EBITDA loss narrowed to $58.5 million, and management reiterated its target to reach cash flow break-even by 2028, maintaining a strong $804 million cash position.
- Cost Structure Shift: Reveal’s workflow changes and SHIELD’s volume leverage drove both products into gross margin positive territory, a critical milestone for scaling.
- ASP Tailwinds: Garden360’s ASP rose to the $3,000–$3,100 range, with reimbursement improvements from Medicare Advantage and commercial payers.
- Screening Ramp: SHIELD’s ADLT status boosted Medicare reimbursement, raising ASP and supporting a $15 million guidance increase for 2025 screening revenue.
Volume acceleration, cost discipline, and reimbursement gains collectively enabled a $30 million guidance raise for 2025, but the business remains in investment mode as it scales commercial infrastructure and R&D for future pipeline catalysts.
Executive Commentary
"We started the year with strong momentum across our portfolio, fueled by groundbreaking product upgrades introduced in 2024, which leverage our smart liquid biopsy platform, as well as the launch of SHIELD. We continue to successfully execute on our long-term vision to support patients throughout their entire cancer journey, from early detection, monitoring of recurrence, to treatment selection."
Helmy, Co‑CEO
"We’re extremely pleased to be able to report that both Reveal and SHIELD became gross margin positive in the first quarter of 2025. For Reveal, we saw the full impact of the workflow changes made towards the end of last year, which have resulted in a significant reduction in cost per test. From an average cost of more than $1,000 in 2024, we’ve achieved a reduction of more than 50%, with the cost per test now less than $500."
Mike Bell, Chief Financial Officer
Strategic Positioning
1. Oncology Platform Expansion
Garden360’s ongoing upgrades and Reveal’s reimbursement wins have solidified Garden Health’s position in therapy selection and minimal residual disease (MRD) monitoring. The launch of Garden360 Tissue, now requiring 40% less tissue and integrating advanced DNA, RNA, and methylome analysis, positions the company to compete for greater share in tissue-based comprehensive genomic profiling (CGP), a key diagnostic segment for oncology.
2. Screening Market Entry and Differentiation
SHIELD’s early commercial traction and positive margin inflection, bolstered by ADLT status and VA Community Care Network coverage, allow Garden Health to accelerate its commercial build-out. The company is targeting unscreened populations with a blood-based, patient-friendly colorectal cancer (CRC) test, and is preparing for multi-cancer detection (MCD) expansion, as evidenced by inclusion in the National Cancer Institute’s Vanguard study.
3. Biopharma and Data Growth
Biopharma and data revenue posted another 21% increase, underpinned by new strategic collaborations (notably Pfizer) and a growing pipeline of companion diagnostic deals. The company’s real-world data assets, enriched by methylation and EMR-linked datasets, are attracting large pharma partners and supporting the long-term value proposition of its smart liquid biopsy platform.
4. Commercial Infrastructure Scale-Up
Management is reinvesting margin gains into sales force expansion, aiming for a 200-person screening sales team by year-end and a long-term target of 700. This scale-up is designed to accelerate SHIELD adoption and capitalize on newly accessible patient populations, but it also raises execution risk as productivity and ramp times remain variable.
5. Pipeline and Clinical Validation
Garden Health’s pipeline is rich with upcoming catalysts, including additional data releases for SHIELD’s multi-cancer detection, further Reveal reimbursement submissions (notably in breast cancer), and potential guideline inclusions that could drive adoption. The company’s ability to deliver on these milestones will be central to sustaining growth and investor confidence.
Key Considerations
This quarter marks a strategic inflection for Garden Health, with operational leverage, reimbursement wins, and commercial investments converging to set a new baseline for growth. However, the company’s ability to manage scale, maintain margin improvement, and deliver on pipeline milestones will determine the durability of its momentum.
Key Considerations:
- Gross Margin Leverage: Reveal and SHIELD’s move into positive gross margin territory is a foundational shift that enables greater investment in commercial scale and pipeline development.
- Reimbursement and ASP Upside: Medicare and commercial wins, notably ADLT status for SHIELD, have created tailwinds for both revenue and profitability, but further payer adoption will be crucial.
- Sales Force Productivity: The path to screening volume guidance relies on hiring and ramping new reps, with full productivity typically taking 12–18 months, introducing timing risk.
- Pipeline Execution: Success in multi-cancer detection, tissue market share gains, and new guideline inclusions could materially expand the company’s addressable market.
- Cash Burn Management: While management reaffirmed its 2028 breakeven target, continued investment in screening and commercial infrastructure will test discipline and capital efficiency.
Risks
Execution risk is elevated as Garden Health ramps its sales force and pursues aggressive commercial expansion. The company’s reliance on reimbursement gains, especially in screening and new indications, leaves it exposed to payer decisions and regulatory timelines. Cash burn remains significant, and while the core business is approaching breakeven, screening investments will continue to weigh on free cash flow in the near term. Competitive dynamics in both liquid and tissue-based diagnostics, as well as the pace of clinical guideline adoption, will influence the sustainability of current growth rates.
Forward Outlook
For Q2 and the remainder of 2025, Garden Health guided to:
- Full-year revenue of $880–$890 million, up from prior guidance of $850–$860 million
- Oncology revenue growth of approximately 18%, with >25% volume growth expected
- SHIELD screening revenue of $40–$45 million, with test volume guidance raised to 52,000–58,000
- Non-GAAP gross margin of 62–63% for the year
Management emphasized:
- Continued investment in commercial infrastructure, especially for SHIELD
- Expectation of back-end loaded screening volume due to sales rep ramp time
Takeaways
Garden Health’s Q1 marked a decisive margin and volume inflection, but the company’s trajectory will hinge on its ability to sustain reimbursement wins, scale its commercial organization, and execute on a growing pipeline of clinical and commercial milestones.
- Margin Milestone: Reveal and SHIELD crossing into positive gross margin territory provides a critical foundation for future growth and cash burn improvement.
- Oncology and Screening Synergy: Product upgrades and reimbursement tailwinds in both core and emerging segments are driving volume acceleration and expanding the company’s total addressable market.
- Execution Watchpoint: Investors should monitor sales force ramp productivity, payer adoption, and the pace of pipeline delivery as key determinants of forward performance.
Conclusion
Garden Health’s first quarter of 2025 showcased tangible operational and financial progress, with margin inflection and volume acceleration supporting a bullish outlook. The company’s raised guidance and commercial investments reflect confidence, but the next phase will test its ability to execute at scale and deliver on its ambitious clinical and commercial roadmap.
Industry Read-Through
Garden Health’s margin breakthrough and volume growth reinforce two core trends in the diagnostics sector: the importance of operational scale for profitability and the accelerating shift toward integrated, multi-modal oncology solutions. SHIELD’s rapid reimbursement progress and traction with unscreened populations highlight the growing appetite for blood-based cancer screening, while the company’s tissue innovations signal intensifying competition for comprehensive genomic profiling contracts. Peer diagnostics firms with single-modality offerings or lagging reimbursement may face mounting pressure, and the sector’s ability to balance investment in commercial infrastructure against cash burn will remain under scrutiny as the market matures.