Natera (NTRA) Q4 2025: MRD Clinical Units Surge 56%, Expanding Oncology Moat
Natera’s Q4 delivered a step-change in oncology adoption as MRD clinical units jumped 56%, with broad-based strength across product lines and margin expansion outpacing expectations. The company’s operational discipline and R&D investments are compounding, positioning Natera to drive further share gains in oncology, women’s health, and organ health. With robust payer tailwinds and new product launches, Natera enters 2026 with high visibility into both revenue growth and margin upside.
Summary
- Oncology Penetration Accelerates: Over half of U.S. oncologists ordered Signatera, reinforcing MRD’s standard-of-care status.
- Margin Expansion Outpaces: Gross margin execution exceeded forecasts, with organic improvement and leaner COGS supporting cash generation.
- R&D and Reimbursement Catalysts: New products and broader payer coverage set up further ASP and volume upside in 2026.
Performance Analysis
Natera’s Q4 2025 results underscored a powerful combination of top-line growth, operational leverage, and accelerating adoption across its core franchises. MRD (minimal residual disease, molecular cancer monitoring) clinical unit volume grew 56% year-over-year, with 225,000 tests processed, as the company’s flagship Signatera platform continued to expand its clinical footprint. Revenue growth was robust, with strong contributions from oncology, women’s health, and organ health segments. Gross margin reached a record 66.9%, well above expectations, driven by both higher ASPs (average selling prices) and disciplined cost of goods sold (COGS) management. Excluding one-time revenue true-ups, organic gross margin still set a record at 63.7%.
Cash generation and operating leverage were on full display. Natera generated over $107 million in cash flow for the year, even as it increased R&D and commercial investments. Days sales outstanding (DSO) improved dramatically to 47 days, reflecting faster collections and better revenue cycle management. Notably, the company achieved net income in Q4, aided by a one-time deferred tax benefit, but the underlying trend points to a clear path toward sustainable profitability. The balance sheet remains strong, with more than $1 billion in cash and securities.
- Clinical Adoption Momentum: MRD test volumes and physician adoption rates hit new highs, driving visibility in oncology.
- Gross Margin Execution: Organic margin gains were supported by leaner operations and higher ASPs, not just favorable mix or one-offs.
- Operating Leverage: SG&A held stable as revenue scaled, with R&D investments targeted to highest-return opportunities.
Segment-level analysis reveals that oncology remains the primary growth engine, but women’s health and organ health are contributing meaningful incremental gains. Management’s approach to guidance remains conservative, with upside potential tied to additional reimbursement wins and new product launches.
Executive Commentary
"Based on our internal data, we estimate that more than 50% of oncologists in the United States ordered a signatory test in the quarter, which just shows you the extent to which MRD is rapidly becoming a part of the standard of care for many cancer patients."
Steve Chapman, Chief Executive Officer
"We think our path of profitability remains very clear, and we are sticking to the plan we've laid out in the past. We fully intend to keep our foot on the gas in terms of investing in the business as we grow our way to profitability."
Michael Brophy, Chief Financial Officer
Strategic Positioning
1. Oncology Platform Scale and Differentiation
Natera’s oncology business is benefiting from a flywheel effect, fueled by clinical data generation and broadening payer coverage. Over 50% of U.S. oncologists ordered Signatera in Q4, and the company continues to expand indications with new data in bladder, head and neck, and GI cancers. The recent integration of phased variant technology, acquired with Foresight Diagnostics, is pushing detection sensitivity to new lows, reinforcing the clinical moat and enabling Natera to target both tumor-informed and tumor-naive MRD markets.
2. Women’s Health Expansion
The launch of Fetal Focus, a 21-gene single-gene NIPT (non-invasive prenatal test), is opening new doors in women’s health. This test addresses a major clinical unmet need by enabling fetal risk assessment when paternal DNA is unavailable, and has already driven new account wins. The product’s robust validation and clinical recognition (oral plenary at SMFM) are expected to drive further share gains, with management signaling additional enhancements in 2026.
3. Organ Health and Clinical Trial Leadership
Prospera, Natera’s donor DNA monitoring platform for organ transplants, is gaining traction as new studies validate its ability to reduce unnecessary biopsies in heart and lung transplants. Enrollment in the randomized ACEs EMB trial and published data in lung transplant surveillance position Prospera as a differentiated tool for both clinical utility and payer adoption. The company’s commitment to large-scale clinical evidence generation is a key differentiator across all franchises.
4. Margin and ASP Expansion Levers
Margin expansion is being driven by a combination of higher ASPs, improved reimbursement, and operational efficiency. Broader Medicare and commercial payer coverage for Signatera is a direct focus, with upside potential if pan-cancer indications are approved. AI-enabled workflow automation is reducing manual steps in the lab and revenue cycle, supporting both cost reductions and faster collections.
5. International and Pipeline Opportunities
Japan is emerging as a major international growth vector, with Signatera approval and launch expected to drive significant revenue in 2027. The company’s ability to replicate U.S. pricing and volume dynamics in international markets could unlock further upside, especially as more data accumulates and regulatory approvals are secured.
Key Considerations
Natera’s Q4 demonstrates a business firing on multiple cylinders, with disciplined execution, expanding clinical evidence, and a robust pipeline of product and reimbursement catalysts. The company’s approach to growth is balanced by a focus on cash flow and operating leverage, with management signaling a willingness to reinvest opportunistically in high-return projects.
Key Considerations:
- Clinical Data as a Growth Engine: Over 100 peer-reviewed papers and a steady cadence of practice-changing studies are driving adoption and payer coverage.
- Reimbursement Upside: Medicare and commercial coverage for additional indications could deliver hundreds of millions in incremental revenue and margin.
- Operating Leverage Inflection: SG&A is expected to remain flat in 2026, with revenue growth outpacing expense growth for the first time.
- Product Pipeline Depth: New launches (Latitude, phased variants, Fetal Focus) and ongoing large clinical trials set up multi-year growth.
- International Expansion: Japan launch in 2027 could be a step-change in global revenue and margin opportunity.
Risks
Key risks include potential delays or denials in payer coverage, especially for new indications or international markets, and execution risk on large-scale clinical trials and product launches. Margin expansion depends on continued ASP gains and operational improvements, which could be pressured by reimbursement headwinds or competitive pricing. Regulatory and competitive dynamics in MRD and NIPT remain fluid, requiring ongoing investment in data generation and product innovation.
Forward Outlook
For Q1 2026, Natera guided to:
- Continued sequential growth in Signatera and Prospera volumes
- Seasonally strong women’s health volumes in Q1, with typical Q2 dip and recovery in Q3/Q4
For full-year 2026, management maintained guidance:
- Revenue between $2.62 billion and $2.7 billion
- Gross margins between 63% and 65%
- Stable SG&A, targeted R&D investment, and strong cash generation
Management emphasized that guidance excludes meaningful revenue true-ups and embeds only conservative ASP gains, leaving room for upside from additional coverage and product launches.
- Potential for margin outperformance tied to further COGS improvements and ASP gains
- Ongoing investment in clinical trials and technology development to support multi-year growth
Takeaways
Natera’s Q4 2025 results reinforce its leadership in oncology diagnostics, with execution and product innovation driving both top-line and bottom-line leverage.
- Oncology Growth Flywheel: Clinical adoption and payer coverage for Signatera are compounding, deepening Natera’s competitive moat and setting up continued share gains.
- Margin and Cash Flow Visibility: Record gross margins and disciplined expense control support a clear path to sustainable profitability, even as R&D investment continues.
- 2026 Catalysts: Watch for new payer coverage decisions, product launches in MRD and women’s health, and international expansion to drive incremental upside.
Conclusion
Natera exits 2025 with accelerating momentum across its core franchises, operational leverage inflecting, and a robust pipeline of clinical and reimbursement catalysts. The company’s disciplined approach to growth and investment positions it as a leader in molecular diagnostics, with multiple levers for upside in 2026 and beyond.
Industry Read-Through
Natera’s results highlight the rapid standardization of MRD testing in oncology, with clinical data and payer alignment driving market expansion. The company’s progress in women’s health and organ health signals growing demand for advanced molecular diagnostics across specialties. Competitors in liquid biopsy, NIPT, and transplant monitoring will face increasing pressure to match Natera’s evidence generation and operational efficiency. Broader industry implications include rising ASPs for differentiated platforms, the importance of payer coverage as a growth lever, and the need for continuous innovation in both product and workflow automation to sustain leadership in precision medicine.