Garden Health (GH) Q2 2025: SHIELD Gross Margin Jumps to 48% as Screening Scale Accelerates

July 30, 2025 | By EarningsIQ Research

SHIELD’s rapid gross margin expansion and oncology volume acceleration marked a pivotal inflection in Garden Health’s Q2 trajectory. The company’s multi-pronged growth—anchored by smart liquid biopsy innovation and commercial infrastructure build-out—positions GH to capture durable share in oncology and screening. Raised guidance and strong cash discipline reinforce management’s conviction in scaling for long-term leadership.

Summary

  • Screening Margin Surge: SHIELD gross margin inflected from 18% to 48% on ASP and COGS gains.
  • Oncology Platform Expansion: G360 Liquid and Reveal drove broad-based test volume and ASP strength.
  • Raised Guidance Confidence: Upward revisions to revenue and volume reflect accelerating adoption and commercial execution.

Performance Analysis

Garden Health delivered 31% year-over-year revenue growth to $232 million, fueled by strong execution across oncology, biopharma, and screening. The oncology segment, now representing over two-thirds of total revenue, grew 22% as test volumes climbed 30% to approximately 64,000, led by GARDEN360 Liquid and Reveal. Biopharma and data revenue set a new record with 28% growth, reflecting deepening partnerships and increased demand for methylation analysis powered by the Infinity platform.

SHIELD, the company’s blood-based colorectal cancer (CRC) screening test, posted a material inflection in both revenue and profitability, reaching $14.8 million in Q2 on 16,000 tests. Gross margin for SHIELD soared to 48% from 18% in Q1, driven by a substantial ASP uplift (over $900 in Q2) following ADLT (Advanced Diagnostic Laboratory Test) status and ongoing COGS (cost of goods sold) reductions. Non-GAAP gross margin for the company reached 66%, up from 60% a year ago, as both Reveal and SHIELD transitioned from gross margin negative to positive territory. Operating expenses increased 20%, largely to support the screening salesforce build-out, while free cash flow burn improved to $65.9 million from $99.1 million in the prior year period.

  • SHIELD Margin Turnaround: Gross margin expansion was driven by higher ASP and sub-$500 cost per test.
  • Oncology ASP Strength: GARDEN360 Tissue ASP hit $2,000, achieving the 2028 target three years early.
  • Biopharma Pipeline Depth: Companion diagnostic partnerships and methylation analysis continued to drive record biopharma revenue.

Management’s decision to reinvest incremental screening gross profit into commercial expansion underscores a focus on durable, long-term growth over short-term profitability.

Executive Commentary

"We continued 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."

Helmi El-Touki, Co-CEO

"SHIELD ASP was over $900 in Q2, which represents a significant increase over the ASP of approximately $600 in Q1. Main drivers of ASP improvement were the increase to our medical 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 volumes."

Mike Bell, Chief Financial Officer

Strategic Positioning

1. Oncology Platform Leadership

GARDEN360 Liquid, the company’s flagship smart liquid biopsy test, continued to gain share and expand clinical utility through rapid app launches. Year-over-year volume growth exceeded 20% for the fourth consecutive quarter, underpinned by new features such as methylation signatures, pharmacogenomic profiling, and advanced negative prediction. Reveal, GH’s tissue-free MRD (minimal residual disease) test, saw accelerated volume growth and compelling clinical data across breast and colon cancer, supporting both reimbursement and broader adoption.

2. Screening Commercial Ramp

SHIELD’s inclusion in NCCN guidelines as a first-line CRC screening modality provided a key external validation and is expected to drive improved payer coverage and patient access. High adherence rates (over 90%) and increasing salesforce productivity prompted management to accelerate the field build-out, targeting over 250 reps by year end. Breakthrough Device Designation for SHIELD’s multi-cancer detection (MCD) test and selection for the NCI Vanguard Study further establish GH’s leadership in early cancer detection.

3. Biopharma and Data Growth

Biopharma revenues reached a record $56 million, with volume mix shifting toward high-value methylation analysis on the Infinity platform. Two new companion diagnostic deals in Q2 and a robust pipeline reinforce GH’s position as a partner of choice for pharmaceutical companies seeking advanced biomarker discovery and clinical trial support.

4. Operational Leverage and Cash Management

Operating leverage is evident as R&D and G&A expenses remained flat, despite substantial top-line growth. Management reiterated its commitment to reducing cash burn, targeting free cash flow breakeven for the core business (ex-screening) by Q4 2025 and company-wide breakeven by 2028. Reinvestment of gross profit into sales and marketing, particularly for screening, is tightly managed within a $200 million annual burn ceiling.

5. Innovation Pipeline and Market Expansion

Continuous innovation, including GARDEN360 app launches and Reveal cohort expansions, sustains GH’s competitive moat. International expansion, favorable ASP dynamics, and new clinical applications provide multiple levers for future growth across both oncology and screening markets.

Key Considerations

Q2 demonstrated Garden Health’s ability to execute on both innovation and commercial scale, while maintaining discipline on costs and cash burn. The company’s multi-segment growth engine, combined with robust clinical data and payer wins, positions it to extend its leadership in precision oncology and early cancer detection.

Key Considerations:

  • SHIELD Margin and ASP Sustainability: Q2 ASP uplift was driven by ADLT status and payer mix, but management expects a blended ASP of ~$800 for the remainder of 2025 as commercial volumes rise.
  • Salesforce Productivity and Scale: Rapid onboarding and ramp of new sales reps is crucial to sustaining SHIELD volume momentum and capturing greenfield primary care channel opportunity.
  • Pipeline Execution Risk: Reveal’s continued reimbursement expansion and SHIELD V2 data/readout timing are critical for future growth and market share defense.
  • Biopharma Partnership Depth: Ongoing success in companion diagnostic deals and methylation analysis is key to maintaining diversified revenue streams.
  • Cash Discipline vs. Growth Investment: Management’s willingness to reinvest gross profit into commercial build-out, while maintaining cash burn targets, underpins long-term profitability goals.

Risks

Key risks include: payer mix shifts that could pressure SHIELD ASP, delays in guideline inclusion (ACS, USPSTF) for screening tests, and slower-than-expected ramp of new sales reps. Execution on pipeline milestones, particularly for Reveal reimbursement and SHIELD V2 data, remains critical. Regulatory changes or adverse reimbursement decisions could materially impact growth and margin trajectory.

Forward Outlook

For Q3 2025, Garden Health guided to:

  • Continued acceleration in SHIELD test volumes and oncology growth.
  • Oncology revenue growth of ~20% YoY for full year 2025.

For full-year 2025, management raised guidance:

  • Total revenue of $915 to $925 million (up from $880 to $890 million prior).
  • SHIELD revenue of $55 to $60 million on 68,000 to 73,000 tests.
  • Non-GAAP gross margin of 63% to 64% (up from 62% to 63%).

Management highlighted several factors that will shape the year:

  • Reinvestment of incremental screening gross profit to accelerate commercial build-out.
  • Free cash flow burn target of $225 to $235 million, with core business breakeven excluding screening by Q4 2025.

Takeaways

Garden Health’s Q2 was defined by operational and financial inflections in both screening and oncology, with margin expansion and volume momentum supporting a raised outlook and long-term strategy.

  • Screening Profitability Milestone: SHIELD’s gross margin surge validates the business model and supports aggressive salesforce expansion.
  • Oncology Platform Depth: GARDEN360 and Reveal continue to set the pace for innovation and clinical adoption, underpinning durable revenue growth.
  • Execution Watchpoint: Investors should monitor SHIELD’s payer mix, salesforce productivity, and timing of key pipeline milestones (Reveal reimbursement, SHIELD V2 data) as critical levers for sustained outperformance.

Conclusion

Garden Health’s Q2 results highlight a company at an inflection point, with SHIELD’s margin turnaround and oncology momentum supporting a raised outlook and disciplined growth strategy. Execution on commercial expansion and pipeline milestones will be the key determinants of future value creation.

Industry Read-Through

GH’s rapid SHIELD margin expansion and payer wins set a new bar for profitability in blood-based cancer screening, raising expectations for peers in the early detection space. Oncology platform innovation, particularly with liquid biopsy and MRD, signals intensifying competition and a shift toward multi-omic, AI-driven solutions. Biopharma partnership success underscores the strategic value of integrated diagnostic data, a theme likely to reshape collaboration models across precision medicine and clinical trials. Investors should watch for similar commercial scaling and margin inflections among diagnostics and screening peers.

GH Healthcare Diagnostics Screening Oncology Biopharma Liquid biopsy