BillionToOne, Inc. (BLLN) Q3 2025 Earnings Call Transcript
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Overview
The earnings call highlights strong financial performance with significant revenue growth, improved gross margins, and a shift from net loss to net income. The Q&A section addresses strategic investments and a conservative guidance approach. Although management avoided specific 2026 guidance, the overall outlook is optimistic with robust revenue growth and strategic expansion plans in prenatal and oncology sectors. These factors suggest a positive stock price movement over the next two weeks.
Key Financial Performance
Annualized Revenue Run Rate (ARR) $334 million in Q3 2025, representing an approximately $69 million sequential increase from Q2 2025. This growth was driven by rapid growth in both prenatal and oncology revenues.
Gross Margin 70% in Q3 2025, a 17 percentage point increase from 53% in Q3 2024. This improvement was due to robust outperformance in ASPs and continued reductions in cost per test.
Revenue $83.5 million in Q3 2025, an increase of 117% compared to $38 million in Q3 2024. This growth was driven by robust test volume growth and expanding ASPs across all products.
Prenatal Revenue $74 million in Q3 2025, representing growth of 101% year-over-year. This was driven by expanded geographic coverage, increased commercial density, and larger health system adoptions.
Oncology Revenue $8.7 million in Q3 2025, growing 664% compared to Q3 2024. This growth was driven by rapid test volume growth of both Select and Response tests as well as improved ASPs.
Blended ASP (Average Selling Price) $501 in Q3 2025, a 44% year-over-year increase and a 10% sequential quarter-over-quarter growth. This was driven by expanded payer coverage, in-house reimbursement efforts, and Medicaid loading.
Blended Cost Per Test $151 in Q3 2025, a 10% decrease year-over-year. This was driven by cost initiatives and increased volumes driving fixed cost per test lower.
Operating Income $9.6 million in Q3 2025, compared to an operating loss of $12.6 million in Q3 2024. This improvement was due to strong revenue growth and gross margin expansion.
Net Income $1.5 million in Q3 2025, compared to a net loss of $14.9 million in Q3 2024. This improvement was driven by strong revenue growth and cost management.
Operating Highlights
UNITY products: Redefining noninvasive prenatal testing with more efficient and sensitive tests for mothers to understand the health status of their developing babies.
Northstar Select and Northstar Response: Guiding therapy selection and monitoring patient response to therapies in oncology.
Geographic expansion: Expanded geographic coverage and increased commercial density in existing markets, along with entering new markets.
Health system adoption: Accelerated adoption by larger health systems and signed a contract with Epic for Aura implementation to enhance UNITY adoption.
Revenue growth: Achieved $83.5 million in Q3 2025 revenue, a 117% increase year-over-year, driven by test volume growth and ASP expansion.
Gross margin improvement: Gross margins reached 70% in Q3 2025, up from 53% in Q3 2024, due to higher ASPs and reduced cost per test.
Profitability: Achieved positive GAAP operating income with an 11.5% operating margin in Q3 2025.
Exclusive agreement with Johnson & Johnson: Established as the official companion diagnostic partner for hemolytic disease of fetus and newborn, positioning UNITY Fetal Antigen test as the first CDx in the NIPT space.
Investment in EMR: Signed a contract with Epic for Aura implementation to support health system adoption and UNITY growth.
Risk or Challenges
Regulatory and Reimbursement Challenges: The company acknowledges the need for expanded payer coverage and reimbursement improvements, which are critical for driving ASP growth. Delays or challenges in achieving these could impact financial performance.
Operational Scaling Risks: The company is investing in EMR systems like Epic for Aura implementation to support health system adoption. However, the 9-month timeline and potential delays in implementation could hinder faster UNITY adoption.
Competitive Pressures: Despite claiming no current impact from competitors, the company acknowledges the launch of competitive products in the fetal risk assessment market, which could pose future challenges.
Economic and Market Conditions: The company’s growth and profitability are tied to market conditions, including payer coverage and health system adoption, which could be influenced by broader economic uncertainties.
Cost Management and Efficiency: While the company has achieved cost reductions, maintaining this efficiency as the business scales and as oncology products with higher COGS grow could be challenging.
Guidance & Outlook
Revenue Growth: BillionToOne expects total revenue for 2025 to be in the range of $293 million to $299 million, representing a growth of 92% to 96% compared to 2024. Fourth quarter revenue is projected to be between $84 million and $90 million, reflecting year-over-year growth of 86% to 100%.
Profitability: The company expects to maintain positive GAAP operating income for both Q4 and the full year of 2025, following its first quarter of positive GAAP operating income in Q3 2025.
Market Opportunity: BillionToOne believes it is uniquely positioned to address a $100 billion U.S. market opportunity over time with its smNGS technology.
Product Expansion and Adoption: The company plans to invest in EMR systems, specifically through a contract with Epic for Aura implementation, expected to go live in 9 months, to accelerate UNITY adoption in health systems across the U.S.
Oncology Growth: The oncology business is expected to continue its rapid growth, supported by expanded coverage decisions and increased adoption of Northstar products, particularly Northstar Response.
Cost and Margin Improvements: BillionToOne anticipates further reductions in cost per test and improvements in average selling prices (ASPs), which will contribute to maintaining a superior gross margin profile.
Shareholder Return Plan
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Key Q&A
Earnings Word Cloud
BLLN Slides
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