Q3 2026 earnings call, November 4, 2026: record $123 million quarter, NorthStar Clear to launch December 15

BillionToOne reported third quarter revenue of $123.0 million, up 47% year over year and 12% sequentially, and raised its 2026 revenue outlook to $460 million to $470 million from $450 million to $465 million. The $7.5 million increase at the midpoint implies full-year growth of roughly 51% to 54%. The more consequential news for investors was strategic: management said NorthStar Clear, its tissue-free minimal residual disease (MRD) test, will launch commercially on December 15 as a pan-cancer product, and argued that it can scale without the bottom-line drag that has led other MRD entrants to throttle volumes.

NorthStar Clear: Pan-Cancer Launch Without Volume Throttling

CEO Oguzhan Atay positioned Clear as tissue-free MRD with tumor-informed performance, available for all solid tumors from day one and requiring only a blood draw. Management estimates MRD at about a $30 billion annual market. Launch data will include a head-to-head comparison against a tumor-informed comparator in colorectal cancer, with studies in lung and breast, and in other subtypes, continuing through 2027 and beyond.

The key claim concerns cost. Responding to a BTIG question about how hard the company would push an unreimbursed test, Atay said BillionToOne's Quantitative Counting Template (QCT) technology amplifies signal enough to allow a materially lower cost profile than competing MRD assays. In his words, "we believe that as the test volume increases, it is going to get to the same place as Response is today. It will be gross margin positive without even having Medicare coverage." He added that the company does not "have to throttle the test volume the way that other companies have to," and will not restrict indications at launch. The same sales force will carry the product, starting with physicians already using Select and Response. Atay also noted that some clinicians are already using Response off-label for MRD, which he cited as evidence of pent-up demand, although the company has not pre-sold Clear.

Investors should temper revenue expectations. Atay was explicit that, with no Medicare coverage, ASPs will not be "thousands of dollars," and that 2027 revenue contribution will be "modest." He nonetheless argued that Clear could ultimately become the largest revenue contributor across all product lines. Management also framed the launch as a de-risking step for a future early detection test, since both problems require detecting very low levels of tumor DNA without tissue access. Reimbursement submissions may begin in colorectal cancer, but MRD evidence generation is slow, and no coverage timeline was offered.

Response Head-to-Head Data and the Medicare Question

On October 7, the company published in the Journal of Liquid Biopsy what it believes is the first head-to-head comparison of a tissue-free test against the most widely used tumor-informed assay in patients on active treatment for advanced cancer. NorthStar Response and the tumor-informed assay agreed on the direction of ctDNA change in 94% of sequential pairs. According to management, in every divergent case the patient's clinical records supported Response, while the tumor-informed results were false positives or false negatives relative to clinical course. These are company characterizations of a real-world, provider-sourced dataset rather than a randomized trial.

Management is leaning on this study to clear the Medicare hurdle. Atay said MolDX "seems to have a much, much higher bar for tissue-free tests," and that the study de-risks coverage, making it "a matter of really when rather than if." Coverage by year-end remains possible, but he acknowledged the timing is uncertain. That is a softer position than certainty, and investors should note that the coverage date has not been firmly committed.

The proposed Clinical Laboratory Fee Schedule (CLFS) changes under PAMA add a potential tailwind. Atay said the Response rate would rise almost 30% and the carrier screening rate would increase by 112%, as an analyst noted. The aneuploidy code, the one code BillionToOne shares with other laboratories for a major test, would fall. Management believes the single-gene NIPT increase would more than offset that cut, and that a higher Response rate would make Response gross margins "particularly positive even without Medicare coverage." The company stressed that it is unclear whether the changes will take effect.

Prenatal: The Growth Algorithm Is Shifting to Health Systems

Prenatal revenue rose 42% to $105.9 million, and Unity Fetal Risk Screen was validated in a prospective study published in the Green Journal on August 18. The study covered 2,212 pregnancies across 9 U.S. institutions, with outcomes obtained for more than 98%. It showed 94.4% sensitivity and 99.5% specificity in a general-population setting, which management called the highest form of evidence for single-gene NIPT as a first-line screen.

The more candid discussion concerned where future volume comes from. Atay said independent clinics, about 40% of the market, are where BillionToOne has historically grown, and that growth there should slow as the company becomes the largest player. The remaining 60% is health systems, with sales cycles of 12 to 24 months. The company has more than 20 health systems in its pipeline, each worth roughly 2,000 to 5,000 tests per quarter. Even after a clinical decision to switch, EMR integration, legal review, phlebotomy and logistics can take 6 to more than 12 months. Management does not build these systems into guidance and expects increasing contribution in 2027 and 2028. The recent Epic Aura integration and the 130-gene fetal risk screen are meant to win every stakeholder, including genetic counselors. Atay said the 130-gene panel "might not be the test that becomes the majority of the test volume. But it becomes a test that unlocks these discussions in health systems." Early EMR integrations are producing higher order counts at existing accounts.

On competition, asked about LabCorp's ownership of Natera-style rival offerings through its acquisition of Fetal Gene, Atay pointed to prior industry consolidation as a source of customer disruption and organic share gains for BillionToOne, and said other tests coming to market "will not have a significant impact" on its positioning. He also said the company contracts only when deals are additive, and does not expect consolidation to change market pricing behavior.

Oncology Nearly Doubles, Margins Still Hold

Oncology revenue rose 96% to $17.1 million, an annualized run rate of about $68 million, against prenatal's $424 million. Management expects oncology sequential volume growth next year to approach prenatal levels. Oncology gross margin improved to 45% before any Medicare coverage for Response, and Response is already near gross margin breakeven. Select's peer-reviewed comparison showed 51% or more actionable therapies than existing competitors, according to Atay, who said the company wins such head-to-heads "literally every day" in clinics.

Mix shift is a visible cost. Total volume grew 25% to about 206,000 tests, up more than 10,000 sequentially, while COGS per test rose 10% year over year to $169 from $161 last quarter, reflecting oncology mix and transient launch costs. Management expects a gradual increase in overall COGS per test as oncology grows faster than prenatal, and acknowledged that consolidated gross margin could be affected over time. For now it was 70.9%, up from 69.9% a year ago, with prenatal at 75%.

Pricing Quality: True-Ups Flattered the Quarter

Blended ASP was $589, up 18% year over year and 7% sequentially, but true-up revenue was $7.6 million versus $2.8 million in Q2, driven mainly by progress resolving held claims at one payer. Excluding true-ups, ASP was $552, up 3% sequentially and 15% year over year, and non-true-up revenue grew 8% sequentially. Underlying drivers included more payer contracts, higher reimbursement for RhD NIPT through its PLA code, and oncology's growing share. CFO Ross Taylor said guidance excludes any Q4 true-up revenue, so the raise rests on cleaner run-rate performance, though it includes historical true-ups already booked.

Profitability and Investment Posture

Operating expenses rose 56% to $76.1 million, with R&D at $20.2 million and SG&A at $55.9 million, modestly outpacing revenue growth. Even so, GAAP operating income reached $11.0 million, a 9% margin versus 5% in Q2, marking a fifth consecutive profitable quarter, with an adjusted EBITDA margin of 18%. Net income was $17.4 million, or $0.32 per diluted share. Free cash flow was $8.6 million, and cash stood at $562 million.

Management intends to hold profitability near current levels while investing more in 2027, specifically in the sales force and in clinical studies that support coverage and higher ASPs. Atay said he does not expect oncology scale-up to affect GAAP profitability, even if consolidated gross margin drifts lower. The company has not issued 2027 guidance, with details expected on the next call.