Natera Reports Third Quarter 2024 Financial Results

Natera Reports Third Quarter 2024

AUSTIN, Texas, November 12, 2024

/PRNewswire/ - Natera, Inc. (NASDAQ: NTRA), a global leader in cell-free DNA and

genetic testing, today reported its financial results for the third quarter ended September 30, 2024.

Recent Strategic and Financial Highlights

strong performance in the third quarter reflects our unwavering dedication to the patients we serve and the passion of our employees

in each of our business areas," said Steve Chapman, chief executive officer of Natera. "We grew volumes, revenue, gross

margin, and cash flow in what continues to be a transformational year for Natera."

Ended September 30, 2024 Financial Results

were $439.8 million in the third quarter of 2024 compared to $268.3 million in the third quarter of 2023, an increase of 63.9%. The increase

in total revenues was driven primarily by a 64.4% increase in product revenues, which were $436.1 million in the third quarter of 2024

compared to $265.2 million in the third quarter of 2023. The increase in product revenues was primarily driven by an increase in volume,

average selling price improvements, as well as cash receipts that were collected during the quarter related to tests delivered in prior

quarters that were fully collected.

approximately 775,800 tests in the third quarter of 2024, including approximately 760,700 tests accessioned in its laboratory, compared

to approximately 626,000 tests processed, including approximately 609,800 tests accessioned in its laboratory, in the third quarter of

In the third quarter

of 2024, Natera recognized revenue on approximately 750,100 tests for which results were reported to customers in the period (tests reported),

including approximately 735,900 tests reported from its laboratory, compared to approximately 590,000 tests reported, including approximately

575,000 tests reported from its laboratory, in the third quarter of 2023, an increase of 27.1% from the prior period.

for the three months ended September 30, 2024 and September 30, 2023 was $271.7 million and $121.0 million, respectively,

representing a gross margin of 61.8% and 45.1%, respectively. Natera had higher gross margin in the third quarter of 2024 primarily as

a result of higher revenues, continued progress in reducing cost of revenues associated with tests processed, as well as incremental

cash receipts during the quarter associated with tests delivered in prior periods that were fully collected. Total operating expenses,

representing research and development expenses and selling, general and administrative expenses, for the third quarter of 2024 were $311.1

million, compared to $232.0 million in the same period of the prior year, an increase of 34.0%. The increase was primarily driven by

headcount growth to support new product offerings as well as increases in consulting and legal expenses.

Loss from operations

for the third quarter of 2024 was $39.3 million compared to $111.0 million for the same period of the prior year. Natera reported a net

loss for the third quarter of 2024 of $31.6 million, or ($0.26) per diluted share, compared to a net loss of $109.0 million, or ($0.95)

per diluted share, for the same period in 2023. Weighted average shares outstanding were approximately 123.3 million in the third quarter

of 2024 compared to 115.2 million in the third quarter of the prior year.

2024, Natera held approximately $922.3 million in cash, cash equivalents, short-term investments and restricted cash, compared to $879.0

million as of December 31, 2023. As of September 30, 2024, Natera had a total outstanding debt balance of $367.0 million, comprised

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

and a net carrying amount of $286.6 million under its seven-year convertible senior notes issued in April 2020. The gross principal

balance outstanding for the convertible senior notes was $287.5 million as of September 30, 2024. All outstanding convertible senior

notes were redeemed or converted on October 11, 2024.

2024 total revenue of $1.61 billion to $1.64 billion; 2024 gross margin to be approximately 58% to 61% of revenues; selling, general

and administrative costs to be approximately $775 million to $825 million; research and development costs to be $375 million to $400

million; and net cash inflow to be $50 million to $75 million3.

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 200 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

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 2024, 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 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 for microdeletions

screening, or 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 associated with trying to obtain premarket clearance or approval, and incur costs associated with

complying with post-market controls, if and when the FDA begins actively regulating our tests pursuant to recently enacted FDA regulations;

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.

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.

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

Lesley Bogdanow, VP of Corporate Communications, Natera, Inc., pr@natera.com

Statements of Operations and Comprehensive Loss

except per share data)