Veracyte, Inc. Q4 FY2025 earnings call

Q4 capped strong year for Verisight. Core businesses showed durability of growth model. Executed key milestones in 2025, including Decipher for metastatic patients launch, Affirma V2 transcriptome transition. Generated clinical evidence across various areas. Pipeline advanced with Optima prelim study results, TrueMRD technical assessment submission, Nightingale lung cancer study enrollment. Affirma saw steady volume growth, lower no-result rate post V2 transition. Decipher had record quarterly ordering providers and orders per physician, strong growth in high-risk categories. Bladder cancer studies showed momentum for Decipher Bladder Classifier. TrueMRD on track for MIBC launch in H1 2026, with clinical evidence building. Procigna set for US launch over summer, commercial team building, market access work ongoing.

Fourth quarter total revenue was $141 million, 19% year-over-year growth. Full year 2025 total revenue was $517 million, 16% growth. Core testing business drove growth, with Decipher volume up 21% and Affirma up 12% in Q4. Affirma had ~18,250 tests in Q4, ~38% market share as of year end, completed transition to V2 transcriptome. Decipher had ~27,200 tests in Q4, 15th consecutive quarter of >20% YoY volume growth, ~33% market penetration. Testing revenue in Q4 was $135.8 million, +21% YoY, driven by Decipher (+27%) and Affirma (+16%). Non-GAAP gross margin was 75.1% in Q4, testing gross margin 76.1%, up 380 basis points YoY.

Reiterates 2026 total revenue guidance of $570 million to $582 million, 10%-13% YoY growth. Testing revenue growth 14%-16% for 2026, Affirma growth mid to high single digits, Decipher growth ~20%. Adjusted EBITDA margin expected to be ~25% in 2026 and future years, barring bespoke investments. Q1 adjusted EBITDA margin expected to be lower due to seasonality.

First question from Sabu Nambi: Asked about guidance conviction, seasonality, high/low end range assumptions. Rebecca responded on Q1 seasonality, volume trends, no-result rate impact on Affirma, Decipher volume outperformance. Second question from Puneet Suda: Asked about margin target decrease, competitive space for Decipher. Mark and Rebecca discussed investment flexibility, Decipher market penetration, competitive dynamics. Third question from Bill Bonello: Asked about investment for product launches, capital allocation. Mark and Rebecca talked about investment plans, capital allocation philosophy. Fourth question from Doug Schenkel: Asked about Q4 gross margin drivers, Decipher bladder volume and trend. Rebecca and Phil discussed gross margin components, Decipher bladder volume and future potential. Fifth question from Kyle Mixon: Asked about 2026 volume expectations for Affirma and Decipher, MRD market seeding. Rebecca and John discussed volume growth drivers, MRD market seeding strategy. Sixth question from Andrew Brockman: Asked about Decipher playbook for TrueMRD, reimbursement strategy. Mark and John talked about TrueMRD grid approach, reimbursement process. Seventh question from Lou Lee: Asked about new product contribution target, MRD next indications. Rebecca and Mark discussed new product contribution, MRD indication flexibility. Eighth question from Tom DeBorsi: Asked about non-testing revenue, biopharma vs product revenue. Mark discussed biopharma revenue expectation, product revenue factors. Ninth question from Keith Hinton: Asked about Decipher bladder commercial resources, synergy. Mark discussed Decipher bladder commercial approach, investment priorities. Tenth question from Mike Madsen: Asked about TrueMRD patient candidates, tax rate. Mark and Rebecca discussed TrueMRD patient count, tax rate expectation. Eleventh question from Colm Titchmarsh: Asked about Percepta nasal swab milestones. Mark discussed Percepta nasal swab trial milestones, timeline.