01—Abstract
Summary
Summary of the 10-K filed February 28, 2025. Cited figures are marked; the original filing is the authoritative source.
Natera, Inc. reported total revenues of $1,696.9 milliona for 2024, up from $1,082.6 million in 2023 and $820.2 million in 2022, with product revenues of $1,685.1 million.
The company narrowed its net loss to $190.4 millionb in 2024 from $434.8 million in 2023 and $547.8 million in 2022, though it still carries an accumulated deficit of $2.6 billion. Stock-based compensation was $274.4 million in 2024, a significant non-cash charge. Gross margin rose to 60.3% from 45.5% in 2023, as stated in the filing's segment disclosure.
Testing volume reached approximately 3.1 million tests processed in 2024, versus 2.5 million in 2023. The company relies heavily on Panorama (NIPT), Horizon (carrier screening), and Signatera (molecular residual disease testing) for most revenue. Microdeletions reimbursement remains low, and the filing flags substantial litigation exposure, including a jury verdict of over $292 millionc against the company in November 2024 in the Guardant Health case and a $57 million Ravgen verdict.
Management states that the company's existing cash and marketable securities of $945.6 milliond in cash, cash equivalents and restricted cash and $22.7 million in marketable securities are sufficient for at least 12 months after February 27, 2025. The company also redeemed its $287.5 million 2.25% Convertible Notes in October 2024, largely through conversion into about 7.5 million shares.
The filing also notes that the FDA's May 2024 final rule on laboratory-developed tests could materially affect the company's ability to market existing and new LDTs, although enforcement discretion may apply to tests first offered before May 6, 2024. Regulatory and reimbursement developments remain key uncertainties for investors.
02—Key points
Key Highlights
- Total revenues rose 56.7% to $1,696.9 million in 2024, with product revenues of $1,685.1 million, or 99% of total revenues.
- Net loss narrowed to $190.4 million in 2024 from $434.8 million in 2023; the company has an accumulated deficit of $2.6 billion.
- Gross margin improved to 60.3% in 2024 from 45.5% in 2023, per the filing's segment disclosure.
- Stock-based compensation of $274.4 million was a major non-cash expense in 2024.
- Cash, cash equivalents and restricted cash were $945.6 million at December 31, 2024, and management believes this is sufficient for at least 12 months after February 27, 2025.
- Litigation exposure is significant, including a November 2024 jury verdict of over $292 million against the company in the Guardant Health case and a $57 million Ravgen verdict.
- The FDA's May 2024 final rule on laboratory-developed tests could materially affect the company's ability to offer its tests; the filing notes lawsuits challenging the rule.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 28, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $1.70B$1.08B | +56.7% |
| R&D Expenses | $404.14M$320.68M | +26.0% |
| SG&A Expenses | $841.31M$618.31M | +36.1% |
| Operating Expenses | $1.92B$1.53B | +25.5% |
| Operating Income | -$222.29M-$446.25M | +50.2% |
| Interest Expense | $10.69M$12.64M | −15.5% |
| Net Income | -$190.43M-$434.80M | +56.2% |
| EPS (Basic) | $-1.53$-3.78 | +59.5% |
| EPS (Diluted) | $-1.53$-3.78 | +59.5% |
| Shares Outstanding (Basic) | 124.72M115.00M | +8.5% |
| Shares Outstanding (Diluted) | 124.72M115.00M | +8.5% |
05—Questions
Frequently Asked Questions
What drove the revenue growth in 2024?
The filing attributes product revenue growth of $616.6 million to continued revenue growth from higher test volumes, as well as average selling price improvements. Test volume rose to approximately 3.1 million tests processed in 2024 from approximately 2.5 million in 2023, with growth primarily from Signatera, Panorama and Horizon.
Is Natera profitable?
No. The company reported a net loss of $190.4 million for 2024, though this was smaller than the $434.8 million loss in 2023. The filing states that the company expects to continue incurring losses for the foreseeable future and has an accumulated deficit of $2.6 billion.
What are the main litigation risks?
The company is involved in multiple patent and false advertising lawsuits. In November 2024, a jury found the company liable for false advertising in the Guardant Health case and awarded damages of $292.5 million; judgment had not been entered at the filing date, and the company plans to appeal. A January 2024 jury also awarded $57 million against the company in a Ravgen patent case.
How is Natera's reimbursement situation for microdeletions testing?
The filing states that many third-party payers do not reimburse for microdeletions screening, and that the company has experienced low average reimbursement rates under the microdeletions CPT code. The company expects these low rates to continue, at least in the near term.
Does the company have enough cash to fund operations?
Management believes existing cash and marketable securities will be sufficient to meet anticipated cash requirements for at least 12 months after February 27, 2025. The company had $945.6 million in cash, cash equivalents and restricted cash and $22.7 million in marketable securities at December 31, 2024, and $80.4 million outstanding under its UBS Credit Line.
06—Continue