Veracyte, Inc. Q2 FY2025 earnings call

• Revenue Growth: Achieved 14% year-over-year total revenue growth, with total revenue of $130 million. Testing revenue grew 14% year-over-year. - Decipher Progress: Continued strong volume growth, with ~25,500 tests, record ordering providers, and expansion into the metastatic prostate population with the Decipher Prostate test. - Afirma Progress: Volume growth of 8%, increased account utilization, and growing interest in the GRID offering for thyroid nodule cancer research. - Prosigna and MRD: Prosigna set for mid-2026 commercial launch, MRD aiming for first half 2026 launch in muscle invasive bladder cancer with future indication expansions. - Geographic and Product Initiatives: French subsidiary restructuring completed, Percepta Nasal Swab study on track.

Decipher: Delivered approximately 25,500 tests, achieving 28% year-over-year volume growth, marking the 13th consecutive quarter of over 25% year-over-year volume growth. Revenue growth driven by testing revenue, with 24% growth. Afirma: Volume growth of 8% year-over-year, resulting in approximately 16,950 tests. Prosigna: Launching as an LDT for the U.S. breast cancer market, with plans to be commercially available in mid-2026 on the V2 Veracyte transcriptome. MRD: Focused on muscle invasive bladder cancer, expecting launch in the first half of 2026, with plans to expand indications annually starting in 2027. Geographic Expansion: French subsidiary restructuring completed, enabling Prosigna supply continuity. Percepta Nasal Swab: On track to reach the enrollment target of 2,400 for the pivotal NIGHTINGALE study.

• 2025 total revenue guidance revised to $496 million to $504 million. - Testing revenue guidance raised to $477 million to $483 million, reflecting raised Decipher outlook and Afirma ASP expectations. - Adjusted EBITDA margin guidance raised to 23.5%. - Third quarter forecast: total revenue decline, testing revenue roughly flat, non-GAAP operating expenses expected to increase sequentially.

• Uncertainties in clinical study timelines and publication of results. - Challenges in reimbursement processes for new products. - Market adoption risks for new indications and products. - Regulatory changes that could impact product launches and sales.

Q: Based on Marc's earlier comments and tracking above 100,000 Decipher tests this year, what are the key drivers to maintaining 20% plus growth?

A: Rebecca Chambers and Marc Stapley noted drivers include metastatic population impact, halo effect on high-risk discussions, Veracyte diagnostics platform data, and strong sales execution.

Q: Can you talk about the growth contribution of the metastatic launch in the back half of the year and 2026?

A: Marc Stapley and John Leite discussed early interest from physicians, multidisciplinary approach, and halo effect on high-risk discussions, with long-term multiyear adoption curve expected.

Q: What are key milestones for Prosigna after launch?

A: Marc Stapley mentioned mid-2026 commercial launch, pivotal study results, and following Decipher's formula with clinical studies and research.

Q: On Afirma, changes in share dynamics and MRD MolDx timing?

A: No meaningful changes in Afirma ordering patterns noted, MolDx submission tech assessment in normal process with pricing discussion key.

Q: Feedback on MolDx tech assessment for MRD and Decipher Prostate GSC data integration?

A: MolDx tech assessment in normal process, Decipher Prostate GSC data integration with SEER database raises visibility and confidence in clinical tests.

Q: Early feedback on digital pathology offering?

A: Positive feedback from collaborators on research use, with robust data set from 90,000 scanned samples.

Q: MRD platform best value indications?

A: Marc Stapley mentioned launching in existing presence indications like urology, breast, and lung, with more to come.

Q: Partnership with Helix for hereditary cancer test?

A: To offer convenient ordering, leveraging NCCN guidelines, with fall launch and data reporting.

Q: 2026 balancing act and cost profile for MRD and Prosigna?

A: Rebecca Chambers discussed cost profiles similar to Afirma, with Decipher's margin trade-off for differentiation, and 2026 budget planning in progress.

Q: Metastatic indication marketability and payer landscape?

A: LCD in place, ~2/3 Medicare population coverage, strong evidence trail supporting use.

Q: Share repurchases consideration?

A: Marc Stapley stated focus on business growth and investment, no specific commentary on share buybacks.

Q: Afirma transition to V2 Transcriptome gross margin benefit?

A: Rebecca Chambers discussed qualitative gross margin benefit from reduced sequencing costs, with unified platform for other tests.