Natera Reports Third Quarter 2021 Financial Results

Natera Reports Third Quarter 2021 Financial

AUSTIN, Texas, November 4, 2021 /PRNewswire/ - Natera, Inc.

(NASDAQ: NTRA), a leader in personalized genetic testing, today reported financial results for the third quarter ended September

30, 2021 and provided an update on recent business progress and financial outlook.

Recent Accomplishments & Highlights

"Natera's strong commercial momentum continued in the third

quarter and we are pleased to be raising our revenue guidance once again," said Steve Chapman, Natera's Chief Executive Officer.

"We are thrilled to be announcing multiple major new features, development programs, and product launches in the transplant and

Third Quarter Ended September 30, 2021 Financial

Total revenues were $158.1 million in the third quarter of 2021 compared

to $98.1 million for the third quarter of 2020, an increase of 61.1%. Product revenues were $150.7 million in the third quarter of 2021

compared to $93.3 million in the third quarter of 2020, an increase of 61.5%. The increase in product revenues was driven by an increase

in test volumes compared to the third quarter of 2020. Natera processed approximately 407,300 tests in the third quarter of 2021, including

approximately 394,200 tests accessioned in its laboratory, compared to approximately 262,000 tests processed, including approximately

249,300 tests accessioned in its laboratory, in the third quarter of 2020.

months ended September 30, 2021, Natera recognized revenue on approximately 373,100 tests for which results were reported to customers

in the period (tests reported), including approximately 360,700 tests reported from its laboratory, compared to approximately 238,600

tests reported, including approximately 226,700 tests reported from its laboratory, in the third quarter of 2020, an overall increase

of 56.4% for the quarter.

Gross profit* for the three months ended September

30, 2021 and 2020 was $76.7 million and $46.3 million, respectively, representing a gross margin of 48.5% and 47.2%, respectively.

Natera was able to achieve higher margins in the third quarter of 2021 compared to the third quarter 2020 primarily as a result of increased

Total operating expenses, representing research and

development expenses and selling, general and administrative expenses, for the third quarter of 2021 were $226.9 million, compared

to $102.1 million in the same period of the prior year, an increase of 122.2%. The increases were primarily driven by headcount

growth to support the Company's expansion, volume growth, and product development.

Loss from operations for the third quarter of 2021

was $150.2 million compared to $55.8 million for the same period of the prior year.

Net loss for the third quarter of 2021 was $151.3

million, or ($1.63) per diluted share, compared to net loss of $58.3 million, or ($0.72) per diluted share, for the same period in 2020.

Weighted average shares outstanding were approximately 92.6 million in the third quarter of 2021 compared to 80.9 million in the second

quarter of the prior year.

September 30, 2021, Natera held approximately $1.0 billion in cash, cash equivalents, short-term investments and restricted cash, compared

to $737.5 million as of December 31, 2020. As of September 30, 2021, Natera had a total outstanding debt balance of $330.1 million, comprised

of $50.0 million including accrued interest under its line of credit with UBS at a variable interest rate of 30-day LIBOR plus 110 bps

and a net carrying amount of $280.1 million under its seven-year convertible senior notes. The convertible senior notes were issued in

April 2020 for net proceeds of $278.3 million. The gross principal balance outstanding for the convertible senior notes was $287.5 million

as of September 30, 2021.

2021 total revenue of $615 million to $625 million; 2021 gross margin to be approximately 49% to 52% of revenues; selling, general and

administrative costs to be approximately $500 million to $520 million; research and development costs to be $240 million to $260

million, and net cash consumption to be $300 million to $340 million**.

* Gross profit is calculated as GAAP total revenues

less GAAP cost of revenues. Gross margin is calculated as gross profit divided by GAAP total revenues.

Cash consumption is calculated as the sum of GAAP net cash used by operating activities (estimated for 2021 to be between $255

million and $295 million) and GAAP net purchases of property and equipment (estimated for 2021 to be approximately $45 million).

a leader in personalized genetic testing and diagnostics, transforming how we make critical health care decisions. Our tests help clinicians

and their patients protect their health and enable earlier and more targeted interventions that lead to better outcomes. Natera's

tests are validated by more than 80 peer-reviewed studies that demonstrate high accuracy, improving patient care outcomes in oncology,

women's health and organ health. Natera operates ISO 13485-certified and CAP-accredited laboratories certified under the Clinical

Laboratory Improvement Amendments (CLIA) in Austin, Texas and San Carlos, California.

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 the company's financial guidance for fiscal 2021, its ability to continue to increase its revenues, its product development

plans and its ability to maintain and grow its business operations in light of the COVID-19 pandemic, 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 maintain our business

and operations as planned in light of the COVID-19 pandemic; we may be unable to further increase the use and adoption of Panorama and

Horizon, through our direct sales efforts or through our laboratory partners, or to develop and successfully commercialize new products,

including Signatera and Prospera; we have incurred losses since our inception and we anticipate that we will continue to incur 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; we may not be successful in commercializing our cloud-based distribution model; our products may not

perform as expected; the results of our clinical studies, including our SNP-based Microdeletion and Aneuploidy RegisTry, or SMART, Study,

may not be compelling to professional societies or payors as supporting the use of our tests, particularly in the average-risk pregnancy

population or for microdeletions screening, or may not be able to be replicated in later studies required for regulatory approvals or

clearances; if either of our CLIA-certified laboratory facilities 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 third-party

payer coverage and reimbursement for Panorama, Horizon and our other 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, such as the increased focus by third-party payers on requiring that prior authorization be obtained prior to conducting a test;

if the FDA were to begin actively regulating our tests, we could incur substantial costs and delays associated with trying to obtain

premarket clearance or approval and incur costs associated with complying with post-market controls; litigation or other proceedings,

resulting from either third party claims of intellectual property infringement or third party infringement of our technology, is costly,

time-consuming and could limit our ability to commercialize our products or services; any inability to effectively protect our proprietary

technology could harm our competitive position or our brand; and we cannot guarantee that we will be able to service and comply with

our outstanding debt obligations or achieve our expectations regarding the conversion of our outstanding convertible notes.

Additional risks and uncertainties that could affect

our financial results are included under the captions, "Risk Factors" and "Management's Discussion and Analysis of Financial

Condition and Results of Operations" in our most recent filings on Forms 10-K and 10-Q and in other filings that we make with the

SEC from time to time. These documents are available on our website at www.natera.com under the Investor Relations section and on the

SEC's website at www.sec.gov.

In light of the significant uncertainties in these

forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we

will achieve our objectives and plans in any specified time frame, or at all. Natera assumes no obligation to, and does not currently

intend to, update any such forward-looking statements after the date of this release.

Mike Brophy, CFO, Natera, Inc., 510-826-2350

Kate Stabrawa, Communications, Natera, Inc., 720-318-4080 pr@natera.com

Condensed Consolidated Balance Sheets