Steve Chapman: Yes. We think NIPT is around 50% penetrated now overall. So obviously, there’s still a lot of room for growth there. There’s a certain portion of patients that never get screening. And so they’re not going to be eligible. So you’re never going to get to 100% penetration. But we’ve said over the next two years to three years that this can get up to kind of 80%, 85% penetration, something in that range. And we do think there’s continued shift away from maternal serum screening toward NIPT.
Unidentified Analyst: Got it. Thanks a lot.
Operator: Next question is from Dan Brennan from TD Cowen. Please go ahead Dan.
Dan Brennan: Great. Thank you. Maybe just one on the guidance. I think on gross margin, Steve, I think you mentioned kind of middle of the range is kind of fair for the second half. So should that be the base case in terms of gross margins and maybe if you can walk through the puts and takes around that? And then just on revenues, really strong quarter, and it looks like you raised the midpoint by about $20 million, just – which is about the level of the beat versus consensus. So is that kind of conservatism? And maybe how should we think about Signatera and women’s health kind of in the back half of the year?
Steve Chapman: Yes. Mike, why don’t you talk a little about the margin consensus and sort of revenue guide. And then I’ll make a couple of comments on just COGS and ASP overall that I think can help improve the margin, but go ahead.
Michael Brophy: Yes, I mean, I think, our approach to guidance remains the same as it’s been the last eight years, which is we try and both guide and forecast the business with what we hope becomes a measure of conservatism. So I think what there’s certainly upside to the guide that we put out here, and we’ve talked about some of the potential drivers of the upside on the call, and Steve can list a few more when he gives some details. But that’s kind of standard playbook for us on the revenue guide. I think this year that also really applies to the gross margin guide. Gross margins of this business as you guys know, those of you who have followed those story for a long time know that gross margins can bounce around paramount quarter-to-quarter.
And you’re certainly seeing that here in the first half. But I do feel like the range we’ve given now is a safe range for us to get through when measured on a full year. I’d expect that to be kind of as you exit this year and going into next, I feel like several of these drivers are going to continue to push that gross margin up. So I’ll pause there. Steve, did you want to add some more color or detail?
Steve Chapman: Yes, I just wanted to kind of jump off on some of the longer-term opportunities as well. I mean, look, we said 45% gross margin this quarter with a couple of those percentage points from one-time events. So kind of net at around 43% sustainable. Now, there’s a lot of opportunities to increase that as we go forward. I mean, there’s significant COGS reduction projects that we’re working on right now. So moving to higher throughput sequencing instruments, we’re at the tail end of finishing some of those projects. We’ve identified three – potentially four logistics based COGS improvement projects that we can, we think we can save $10 million plus maybe $20 million on the COGS line as we move to implement those.
