Natera Reports Fourth Quarter and Full Year 2024 Financial Results

Natera Reports Fourth Quarter and Full Year 2024 Financial Results

AUSTIN, Texas, February 27, 2025 /PRNewswire/ - Natera, Inc.

(NASDAQ: NTRA), a global leader in cell-free DNA and genetic testing, today reported

its financial results for the fourth quarter and full year ended December 31, 2024.

Recent Financial Highlights

"We had a strong finish to the year,

with excellent performance across the board," said Steve Chapman, chief executive officer of Natera. "Our ongoing

success can be attributed to the mission-driven mindset of our team and our focus on patients. We have significant momentum, with

several potential catalysts in 2025 and beyond."

Fourth Quarter and Year Ended December 31,

2024 Financial Results

Total revenues were $476.1 million in the fourth

quarter of 2024 compared to $311.1 million in the fourth quarter of 2023, an increase of 53.0%. The increase in total revenues was driven

primarily by a 53.9% increase in product revenues, which were $472.9 million in the fourth quarter of 2024 compared to $307.3 million

in the fourth quarter of 2023. The increase in product revenues was primarily driven by an increase in volume and average selling price

Natera processed approximately 792,800 tests in

the fourth quarter of 2024, including approximately 778,400 tests accessioned in its laboratory, compared to approximately 626,800 tests

processed, including approximately 610,100 tests accessioned in its laboratory, in the fourth quarter of 2023.

In the fourth quarter of 2024, Natera recognized

revenue on approximately 771,700 tests for which results were reported to customers in the period (tests reported), including approximately

758,200 tests reported from its laboratory, compared to approximately 619,800 tests reported, including approximately 604,200 tests reported

from its laboratory, in the fourth quarter of 2023, an increase of 24.5% from the prior period.

Total revenues were $1,696.9 million in the full

year 2024 compared to $1,082.6 million in the full year 2023, an increase of 56.7%. The increase in total revenues was driven primarily

by a 57.7% increase in product revenues, which were $1,685.1 million in the full year 2024 compared to $1,068.5 million in the full year

2023. The increase in product revenues was primarily driven by an increase in volume and average selling price improvements.

Natera processed approximately 3,064,600 tests

in the full year 2024, including approximately 3,001,900 tests accessioned in its laboratory, compared to approximately 2,496,100 tests

processed, including approximately 2,426,500 tests accessioned in its laboratory, in the full year 2023.

In the full year 2024, Natera recognized revenue

on approximately 2,926,400 tests for which results were reported to customers in the period (tests reported), including approximately

2,867,400 tests reported from its laboratory, compared to approximately 2,388,200 tests reported, including approximately 2,323,400 tests

reported from its laboratory, in the full year 2023, an increase of 22.5% from the prior period.

Gross profit2 for the three

months ended December 31, 2024 and 2023 was $299.6 million and $159.9 million, respectively, representing a gross margin of 62.9%

and 51.4%, respectively. Gross profit2 for the year ended December 31, 2024 and 2023 was $1,023.2 million and $492.7

million, respectively, representing a gross margin of 60.3% and 45.5%, respectively. Natera had higher gross margin in the fourth

quarter of 2024 and for the full year 2024 primarily as a result of higher revenues and continued progress in reducing cost of

revenues associated with tests processed. Total operating expenses, representing research and development expenses and

selling, general and administrative expenses, for the fourth quarter of 2024 were $364.4 million, compared to $244.4 million in the

same period of the prior year, an increase of 49.1%. Total operating expenses, representing research and development expenses and

selling, general and administrative expenses, for the full year 2024 were $1,245.5 million, compared to $939.0 million in the same

period of the prior year, an increase of 32.6%. The increases in both periods were primarily driven by headcount growth to support

new product offerings as well as increases in consulting and legal expenses.

Loss from operations for the fourth quarter of

2024 was $64.7 million compared to $84.5 million for the same period of the prior year. Loss from operations for full year 2024 was $222.3

million compared to $446.3 million for the same period of the prior year.

Natera reported a net loss for the fourth quarter

of 2024 of $53.8 million, or ($0.41) per diluted share, compared to a net loss of $78.0 million, or ($0.65) per diluted share, for the

same period in 2023. Weighted average shares outstanding were approximately 131.4 million in the fourth quarter of 2024 compared to 119.3

million in the fourth quarter of the prior year. Natera's net loss for the full year 2024 was $190.4 million, or ($1.53) per diluted

share, compared to a net loss of $434.8 million, or ($3.78) per diluted share, in 2023. Weighted average shares outstanding were 124.7

million in the full year 2024 compared to 115.0 million for the same period in the prior year.

At December 31, 2024, Natera held

approximately $968.3 million in cash, cash equivalents, short-term investments and restricted cash, compared to $879.0 million as of

December 31, 2023. As of December 31, 2024, Natera had a total outstanding debt balance of $80.4 million including accrued interest

under its line of credit with UBS at a variable interest rate of 30-day SOFR plus 50 bps. The Company previously had convertible

senior notes which were redeemed or converted on October 11, 2024.

Natera anticipates 2025 total revenue of $1.87

billion to $1.95 billion; 2025 gross margin to be approximately 60% to 64% of revenues; selling, general and administrative costs to

be approximately $950 million to $975 million; research and development costs to be $525 million to $550 million; and net cash inflow

is a global leader in cell-free DNA and genetic testing, dedicated to oncology, women's health, and organ health. We aim to make

personalized genetic testing and diagnostics part of the standard of care to protect health and enable earlier, more targeted interventions

that help lead to longer, healthier lives. Natera's tests are validated by more than 250 peer-reviewed publications that demonstrate

high accuracy. Natera operates ISO 13485-certified and CAP-accredited laboratories certified under the Clinical Laboratory Improvement

Amendments (CLIA) in Austin, Texas and San Carlos, California. For more information, visit www.natera.com.

Conference Call Information

Forward-Looking Statements

This press release contains forward-looking

statements under the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of

historical facts, including statements regarding its market opportunity, anticipated products and launch schedules, reimbursement

coverage and product costs, commercial and strategic partnerships and acquisitions, user experience, clinical trials and studies,

and its strategies, goals and general business and market conditions, are forward-looking statements. Any forward-looking statements

contained in this press release are based upon Natera's current plans, estimates, and expectations, as of the date of this

release, and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements

are subject to known and unknown risks and uncertainties that may cause actual results to differ materially, including: we face

numerous uncertainties and challenges in achieving our financial projections and goals; we may be unable to further increase the use

and adoption of our products through our direct sales efforts or through our laboratory partners; we have incurred net losses since

our inception and we anticipate that we will continue to incur net losses for the foreseeable future; our quarterly results may

fluctuate from period to period; our estimates of market opportunity and forecasts of market growth may prove to be inaccurate; we

may be unable to compete successfully with existing or future products or services offered by our competitors; we may engage in

acquisitions, dispositions or other strategic transactions that may not achieve our anticipated benefits and could otherwise disrupt

our business, cause dilution to our stockholders or reduce our financial resources; our products may not perform as expected; the

results of our clinical studies may not support the use and reimbursement of our tests, particularly for microdeletions screening,

and may not be able to be replicated in later studies required for regulatory approvals or clearances; if either of our primary

CLIA-certified laboratories becomes inoperable, we will be unable to perform our tests and our business will be harmed; we rely on a

limited number of suppliers or, in some cases, single suppliers, for some of our laboratory instruments and materials and may not be

able to find replacements or immediately transition to alternative suppliers; if we are unable to successfully scale our operations,

our business could suffer; the marketing, sale, and use of Panorama and our other products could result in substantial damages

arising from product liability or professional liability claims that exceed our resources; we may be unable to expand, obtain or

maintain third-party payer coverage and reimbursement for our tests, and we may be required to refund reimbursements already

received; third-party payers may withdraw coverage or provide lower levels of reimbursement due to changing policies, billing

complexities or other factors; we could incur substantial costs and delays complying with governmental regulations, including

recently enacted FDA regulations regarding LDTs; litigation and other regulatory or governmental proceedings, related to our

intellectual property or the commercialization of our tests, are costly, time- consuming, could result in our obligation to pay

material judgments or incur material settlement costs, and could limit our ability to commercialize our tests; and any inability to

effectively protect our proprietary technology could harm our competitive position or our brand..

We discuss these and other risks and uncertainties