Q4 and Full Year 2024 Earnings Presentation February 24, 2025 © 2025 Veracyte, Inc. All rights reserved. 1 Forward-looking statements and non-GAAP information This presentation contains forward-looking statements, including, but not limited to our statements related to our plans, objectives, and expectations (financial and otherwise), including with respect to our Marseille, France operations; 2025 and 2026 financial and operating results; our strategic focuses for the business; and our intentions with resp ...

Company Performance - Veracyte reported quarterly earnings of $0.36 per share, exceeding the Zacks Consensus Estimate of $0.29 per share, compared to a loss of $0.04 per share a year ago, representing an earnings surprise of 24.14% [1] - The company posted revenues of $118.63 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.60%, and showing an increase from year-ago revenues of $98.2 million [2] - Over the last four quarters, Veracyte has consistently surpassed consensus EPS estimates and revenue estimates [2] Stock Outlook - The immediate price movement of Veracyte's stock will depend on management's commentary during the earnings call [3] - Despite underperforming the market with a loss of about 1.1% since the beginning of the year, the stock is currently rated Zacks Rank 1 (Strong Buy), indicating expectations of outperforming the market in the near future [6] - The current consensus EPS estimate for the upcoming quarter is $0.18 on revenues of $111.13 million, and for the current fiscal year, it is $1 on revenues of $487.52 million [7] Industry Context - The Medical - Instruments industry, to which Veracyte belongs, is currently in the top 33% of over 250 Zacks industries, suggesting a favorable outlook for stocks within this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Revenue Growth - Fourth quarter total revenue increased by 21% to $118.6 million, with testing revenue growing by 24% to $112.2 million[1][4][5] - Full year total revenue rose by 23% to $445.8 million, while testing revenue increased by 28% to $419.0 million[9][10] - Decipher revenue grew by 44% in Q4 and 43% for the full year, while Afirma revenue increased by 4% in Q4 and 14% for the full year[4][9] - Total volume of tests conducted in Q4 increased by 22% to 41,271 tests, with testing volume for the full year rising by 20% to 152,750 tests[4][9] - Total revenue for the three months ended December 31, 2024, was $118,632,000, representing a 20.8% increase from $98,199,000 in the same period of 2023[28] - Testing revenue increased to $112,152,000 for the three months ended December 31, 2024, up 24.1% from $90,385,000 in the prior year[28] Profitability - Net income for Q4 was $5.1 million, representing 4.3% of revenue, and for the full year, net income was $24.1 million, or 5.4% of revenue[7][10] - Adjusted EBITDA for Q4 was $26.1 million, or 22.0% of revenue, and for the full year, it was $91.9 million, or 20.6% of revenue[8][12] - GAAP net income for Q4 2024 was $5.113 million, compared to a net loss of $28.293 million in Q4 2023, representing a significant turnaround[41] - Non-GAAP net income for the twelve months ended December 31, 2024, was $92.968 million, compared to $43.293 million in 2023, showing strong growth[41] Expenses and Costs - Operating expenses for the twelve months ended December 31, 2024, totaled $282,003,000, down from $315,479,000 in 2023, a decrease of 10.6%[28] - Total operating expenses for Q4 2024 were $74.579 million, down from $100.295 million in Q4 2023, indicating a reduction in costs[39] - Stock-based compensation expense for the twelve months ended December 31, 2024, was $36,249,000, compared to $33,489,000 in 2023, showing an increase of 8.3%[29] - The company reported a stock-based compensation expense of $9.629 million for Q4 2024, compared to $7.607 million in Q4 2023, indicating increased equity compensation[41] Future Guidance - The company expects 2025 testing revenue to be between $470 million and $480 million, indicating a year-over-year growth of 12% to 15%[16] - Adjusted EBITDA as a percentage of revenue is projected to be approximately 21.6% in 2025, up from 20.6% in 2024[17] - The company plans to provide total revenue guidance for 2025 once there is more clarity on the impact of its Marseille operations[16] Asset and Cash Position - Cash and cash equivalents increased to $239,087,000 as of December 31, 2024, compared to $216,454,000 at the end of 2023[36] - Total assets grew to $1,300,035,000 as of December 31, 2024, up from $1,114,906,000 in 2023, indicating a 16.6% increase[32] Acquisitions and Investments - The acquisition of C2i contributed to the company's growth strategy, with a cash outflow of $5,012,000 for the acquisition net of cash acquired[34] - The acquisition-related expenses for the twelve months ended December 31, 2024, included $6.631 million, primarily related to the acquisition of C2i Genomics[41] - The company is evaluating its operations in Marseille, France, and considering potential divestiture options for its French subsidiary[13][14] Research and Development - Research and development expenses for Q4 2024 were $19.290 million, slightly up from $18.673 million in Q4 2023, reflecting continued investment in innovation[39] Impairment and Restructuring - The twelve months ended December 31, 2024, included significant expenses related to the impairment charge associated with HalioDx, totaling $2.7 million for Q4 2024 and $32.0 million for Q4 2023[3] - For the twelve months ended December 31, 2024, restructuring costs were incurred due to a reduction in the Biopharmaceutical and Other segment[3]

Core Viewpoint - Veracyte (VCYT) is positioned for growth due to strong performance in its Afirma and Decipher tests, although it faces challenges from biopharma issues and macroeconomic conditions [1][8]. Financial Performance - Over the past year, VCYT has outperformed the industry and the S&P 500, with shares increasing by 67.3% compared to the industry's 5.9% and the S&P 500's 24.4% [2]. - The company has a market capitalization of $3.26 billion and an earnings yield of 2.37%, which is higher than the industry's 3.3% yield [2]. - VCYT achieved an average earnings surprise of 520.6% over the trailing four quarters [2]. Product Performance - The Afirma test reported 15,100 results in Q3 2024, marking a 12% increase due to new customer acquisition and retention [3]. - Veracyte is expanding its market share for the Afirma test, supported by growing awareness of its quality and performance [4]. - The Decipher prostate cancer tests reached a new volume record of 21,250 tests in Q3 2024, with growth across all NCCN localized risk categories [5]. Market Trends - The updated NCCN guidelines are driving adoption of the Decipher test through increased awareness and education [6]. - Veracyte is addressing high-risk prostate cancer by developing the Decipher offering for advanced-stage patients [6]. Liquidity and Solvency - At the end of Q3, Veracyte had cash and cash equivalents of $274 million, up from $236 million in Q2, with no current debt [7]. - The company's current ratio improved to 5.08 from 4.44 in the previous quarter, indicating strong solvency [7]. Growth Estimates - The Zacks Consensus Estimate for Veracyte's EPS has risen from 93 cents to $1.12 in the past 30 days [10]. - The estimated revenue for 2024 is projected at $443.9 million, reflecting a 22.9% increase from the previous year [10].

Core Viewpoint - Veracyte (VCYT) has demonstrated significant growth, with a 44% increase in share price over the past year, outperforming the industry and S&P 500 [1] Company Overview - Veracyte, headquartered in San Francisco, CA, specializes in advanced genomic tests that enhance diagnostic and treatment decisions for cancer and other diseases, thereby reducing unnecessary procedures and expediting appropriate treatment [2] Growth Factors - The growth in Veracyte's share price is attributed to the strong performance of the Afirma solution, which reported a 12% increase in test results in Q3 2024, driven by new customer acquisition and retention [3] - The Decipher Prostate cancer tests are effectively predicting the risk of disease progression, with a record 21,250 tests conducted in Q3 2024, and the expansion of the Decipher franchise into bladder cancer [4] - Veracyte is investing in long-term growth drivers, including the Percepta Nasal Swab test and developing decentralized IVD tests in collaboration with Illumina, enhancing control over its supply chain [5] Financial Estimates - The Zacks Consensus Estimate projects a 137.3% increase in earnings per share (EPS) for 2024, reaching 38 cents, and a 65.8% increase for 2025, reaching 63 cents [9] - Revenues are expected to grow by 22.9% in 2024 to $443.9 million and reach $487.5 million in 2025 [9]

Veracyte (VCYT) delivered third-quarter 2024 earnings of 19 cents per share, which marked a stupendous improvement from the year-ago period’s loss of 3 cents per share. The figure beat the Zacks Consensus Estimate of 2 cents per share by a huge 850%.The company-adjusted earnings per share (EPS) were 33 cents, reflecting a 94.1% year-over-year improvement.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.RevenuesRevenues increased 28.6% year over year to $115.9 million, which outpaced ...

Revenue and Growth - Revenue primarily derived from Decipher Prostate and Afirma tests, with Medicare contributing 31% and UnitedHealthcare 13% for the three months ended September 30, 2024[115]. - Testing revenue increased by $27.5 million (34%) for the three months ended September 30, 2024, driven by a 24% volume increase and an 8% average selling price increase[129]. - Total revenue for the three months ended September 30, 2024, was $115.9 million, a $25.8 million (29%) increase compared to the same period in 2023[128]. - For the nine months ended September 30, 2024, total revenue increased by $64.3 million (24%) to $327.1 million, primarily due to a $70.7 million increase in testing revenue[130]. - The company aims to expand its base of prescribing physicians and increase penetration in existing accounts to drive revenue growth[100]. Expenses and Costs - Research and development expenses are significant and can vary substantially by quarter due to clinical trial timing and sample acquisition[114]. - General and administrative expenses increased by $9.4 million (58%) to $25.7 million for the three months ended September 30, 2024[128]. - Research and development expenses for the three months ended September 30, 2024, were $17.6 million, a $4.3 million (32%) increase compared to the same period in 2023[128]. - Cost of testing revenue increased by $7.2 million, or 33%, for the three months ended September 30, 2024, and by $18.1 million, or 28%, for the nine months ended September 30, 2024, due to increased testing volume and higher staffing[133][134]. - Selling and marketing expense decreased by $1.7 million, or 7%, for the three months ended September 30, 2024, and by $5.6 million, or 7%, for the nine months ended September 30, 2024, primarily due to reduced sales support for the Envisia product[141][142]. Profitability - The company reported a net income of $15.2 million for the three months ended September 30, 2024, compared to a net loss of $29.6 million in the same period in 2023[128]. - Gross profit for the three months ended September 30, 2024, was $79.0 million, reflecting a $21.3 million (37%) increase from the prior year[128]. Cash Flow and Liquidity - Cash provided by operating activities for the nine months ended September 30, 2024, was $50.6 million, compared to $28.7 million in the same period of 2023[159]. - As of September 30, 2024, the company had cash and cash equivalents of $274.1 million, an increase of $57.6 million during the nine months[152]. - Cash used in investing activities for the nine months ended September 30, 2024, was $2.1 million, primarily for the purchase of property, plant, and equipment[162]. Market and Economic Conditions - The company operates in a challenging macroeconomic environment, with potential impacts from inflation and currency fluctuations[97]. - The company is exposed to market risks primarily related to interest rates and foreign currency[166][167]. - Inflation has not had a material effect on the company's business, financial condition, or operating results to date[168]. - The company faces inflation headwinds in compensation, travel, supply, and inventory costs[168]. Acquisitions and Investments - The company acquired C2i in February 2024 to enhance its role in the cancer patient journey, focusing on monitoring treatment success[96]. - The company expects to incur significant expenses as it invests in the continued development of its innovation engine and early-stage products[121]. - The company expects to pay up to an additional $25.0 million in contingent consideration related to the C2i Acquisition, with $5.0 million forecasted to be paid within the next 12 months[156]. Accounting and Estimates - There have been no material changes to the company's critical accounting policies and estimates compared to the previous Annual Report[165]. - The company believes that its accounting policies are critical to understanding its historical and future performance[165]. - The company’s estimates and assumptions are based on historical experience and other reasonable factors[165].

Financial Data and Key Metrics Changes - Q3 2024 revenue totaled $115.9 million, a 29% year-over-year increase, driven by testing revenue growth of 34% [6][32] - Total testing volume increased to approximately 39,000 tests, a 20% increase compared to the same period in 2023 [32] - Non-GAAP gross margin was 71%, up approximately 130 basis points year-over-year, while testing gross margin was 74%, up approximately 10 basis points [35] Business Line Data and Key Metrics Changes - Decipher testing revenue grew by 48% year-over-year, with a record 21,250 tests delivered, up 36% year-over-year [32][8] - Afirma testing revenue increased by 19%, with close to 15,100 tests delivered, up 12% from the prior year [32][19] - Product revenue was $3.2 million, down 21% year-over-year due to ongoing supply challenges [34] Market Data and Key Metrics Changes - The NCCN guidelines have positively impacted Decipher's adoption across all localized risk categories, driving growth among existing and new physicians [49] - The market for Decipher is expected to expand with the addition of the metastatic indication, potentially adding 30,000 new patients annually [72] Company Strategy and Development Direction - The company aims to expand Decipher's market size and penetration while continuing strong growth for Afirma [22] - Long-term growth drivers include launching IVD products globally, expanding into minimal residual disease testing, and addressing new cancer challenges [23] - The decision to pause the Envisia CLIA test reflects a strategic focus on more promising growth areas [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering robust revenue growth in the near and mid-term, supported by strong demand for Decipher and Afirma [22] - The company raised its 2024 total revenue guidance to $442 million to $445 million, reflecting improved outlook for the testing business [38] - Management highlighted the importance of generating clinical evidence to drive guideline inclusion and reimbursement for Decipher [9][92] Other Important Information - The company generated $38 million in cash during Q3, ending the quarter with $274.1 million in cash and cash equivalents [37] - The company plans to launch an MRD test in muscle invasive bladder cancer in the first half of 2026 [26] Q&A Session Summary Question: Future growth and strategic direction - Management indicated that the focus will remain on existing successful products while continuing to invest in strategic initiatives for long-term growth [46] Question: Drivers of Decipher's growth - Growth is attributed to consistent adoption across risk categories and the impact of NCCN guidelines, with both new and existing physicians increasing usage [48] Question: 2025 growth expectations - Management noted that while specific numbers for 2025 are not yet available, they expect continued growth driven by Decipher's expansion into the metastatic market [56] Question: Product revenue decline - The decline in product revenue is partly intentional as the company manages demand amid supply chain challenges [78] Question: Impact of clinical studies on Decipher - Management emphasized the importance of clinical studies like STAMPEDE in driving guideline inclusion and adoption of Decipher [92]

Group 1 - Veracyte reported quarterly earnings of $0.19 per share, significantly exceeding the Zacks Consensus Estimate of $0.02 per share, and compared to a loss of $0.03 per share a year ago, representing an earnings surprise of 850% [1] - The company achieved revenues of $115.86 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 5.81%, and this is an increase from year-ago revenues of $90.11 million [2] - Veracyte has consistently surpassed consensus EPS estimates over the last four quarters, indicating strong performance [2] Group 2 - The stock has gained approximately 30.6% since the beginning of the year, outperforming the S&P 500's gain of 21.2% [3] - The future performance of Veracyte's stock will depend on management's commentary during the earnings call and the company's earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.07 on revenues of $116.31 million, and for the current fiscal year, it is $0.16 on revenues of $437.08 million [7] Group 3 - The Medical - Instruments industry, to which Veracyte belongs, is currently ranked in the top 36% of over 250 Zacks industries, suggesting a favorable outlook for the sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor decisions [5]

Financial Performance - Total revenue for Q3 2024 reached $115.9 million, a 29% increase compared to $90.1 million in Q3 2023[5] - Testing revenue grew to $109.5 million, marking a 34% increase from $82.0 million in Q3 2023[5] - Net income for Q3 2024 was $15.2 million, an improvement of 151% year-over-year[7] - Adjusted EBITDA for Q3 2024 was $27.3 million, representing 24% of revenue, up from 14% in Q3 2023[8] - Total revenue for the three months ended September 30, 2024, was $115,860, a 28.6% increase from $90,108 in the same period of 2023[17] - Net income for the three months ended September 30, 2024, was $15,155, a significant improvement from a net loss of $29,618 in the same period of 2023[19] - Non-GAAP Net Income for the nine months ended September 30, 2024, was $64,019,000, compared to $28,046,000 for the same period in 2023, reflecting a growth of about 128%[24] Revenue Guidance and Growth - The company raised its full-year 2024 total revenue guidance to $442 million to $445 million, reflecting year-over-year growth of 22% to 23%[8] - Decipher revenue increased by 48% to approximately 21,250 tests, while Afirma revenue grew by 19% to close to 15,100 tests compared to Q3 2023[3] Cash and Assets - Cash generated from operations in Q3 2024 was $30.0 million, ending the quarter with $274.1 million in cash and cash equivalents[3] - Cash and cash equivalents increased to $274,079 as of September 30, 2024, up from $216,454 at the end of 2023, representing a 26.6% increase[20] - Total assets as of September 30, 2024, were $1,275,021, an increase from $1,114,906 at the end of 2023, representing a 14.4% growth[20] Operating Expenses - Operating expenses for Q3 2024 were $67.0 million, with non-GAAP operating expenses growing 11% to $57.6 million[6] - Operating expenses for the three months ended September 30, 2024, totaled $66,993, down from $89,426 in the same period of 2023, indicating a 25% reduction[17] - Non-GAAP total operating expenses for the three months ended September 30, 2024, were $57,642,000, compared to $51,751,000 for the same period in 2023, showing an increase of 11.0%[23] Profitability Metrics - Total gross margin for Q3 2024 was 68%, compared to 64% in Q3 2023[6] - GAAP gross profit for the three months ended September 30, 2024, was $79,010,000, compared to $57,687,000 for the same period in 2023, resulting in a 37.0% increase[22] - Non-GAAP gross margin improved to 71% for the three months ended September 30, 2024, compared to 70% for the same period in 2023[23] Research and Development - Research and development expenses for the nine months ended September 30, 2024, were $50,004, compared to $38,632 for the same period in 2023, marking a 29.3% increase[17] - The company is focused on expanding clinical evidence for Decipher Prostate and enhancing its strategic growth drivers[4] Stock and Acquisitions - The company completed the acquisition of C2i, resulting in a cash outflow of $5,012 during the nine months ended September 30, 2024[21] - Acquisition-related expenses for Q3 2024 were $75,000, while the previous year reported a benefit of $(4,581,000), indicating a shift in expense recognition[24] Future Outlook - Future outlook includes continued investment in new technologies and potential market expansions following recent acquisitions[25] - The company is focusing on a multi-platform IVD strategy, which has influenced its financial adjustments and performance metrics[25]