AUSTIN - Natera, Inc. (NASDAQ:NTRA), a pioneer in cell-free DNA testing, has delivered a robust first quarter, surpassing analyst expectations with a significant earnings beat.
The company's shares soared by 20% as it reported a narrower loss per share of -$0.56 compared to the consensus estimate of -$0.71. Total revenue for the quarter also exceeded forecasts, coming in at $367.74 million against an anticipated $316.31 million.
The company's financial performance in the first quarter of 2024 showcased a remarkable year-over-year (YoY) revenue increase of 52.1%, rising from $241.8 million in the first quarter of 2023.
This growth was primarily fueled by a 53.4% surge in product revenues, which stood at $364.7 million. The upward trajectory was attributed to heightened test volumes and improvements in the average selling price.
Natera's gross margins improved significantly to 56.7% in the first quarter of 2024, up from 38.7% in the same period last year, reflecting the company's efficiency gains and successful cost management strategies. The number of tests processed also climbed by 17.5%, with approximately 735,800 tests in the first quarter of 2024, compared to around 626,200 tests in the prior year's quarter.
Steve Chapman, Natera's CEO, highlighted the company's strong start to the year, emphasizing the achievement of cash flow breakeven ahead of schedule.
"We continued to deliver on our mission to transform disease management with the launch of a highly differentiated product in women's health and the publication of practice-changing data in oncology and organ health," Chapman stated.
Looking ahead, Natera anticipates 2024 total revenue to be between $1.42 billion and $1.45 billion. The company expects gross margins to remain robust, ranging from 53% to 55% of revenues.
Operating expenses are projected to increase, with selling, general, and administrative costs estimated to be between $700 million and $750 million, and research and development costs forecasted to be between $350 million and $375 million. The net cash inflow (consumption) is predicted to be between a loss of $25 million and a gain of $25 million.
Investors have responded positively to the earnings beat and the company's strong performance indicators, as evidenced by the significant uptick in Natera's stock price. The company's strategic focus on expanding its product offerings and improving operational efficiency appears to be resonating well with the market, setting a positive tone for the year ahead.
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