Core Insights - Veracyte, Inc. announced new data from the BALANCE trial indicating that the PAM50 molecular signature can predict which patients with recurrent prostate cancer will benefit from apalutamide hormone therapy alongside salvage radiation therapy [1] Company Summary - Veracyte, Inc. is a leading genomic diagnostics company focused on developing innovative tests to improve patient outcomes [1] - The PAM50 biomarker is currently available for Research Use Only on the Decipher GRID platform [1] Industry Context - The findings from the BALANCE trial highlight the growing importance of molecular diagnostics in personalizing cancer treatment, particularly in prostate cancer [1]

Core Insights - Veracyte has experienced significant growth in 2025, with Decipher growing by 32% year-to-date and Afirma by 9% year-to-date, indicating strong performance across its core business segments [2]. Business Performance - The company has achieved numerous accomplishments in 2025, feeling positive about its current position compared to the beginning of the year [2]. - The growth in the core business is described as encouraging and impressive, reflecting the company's successful strategies and market positioning [2].

Summary of Veracyte Conference Call Company Overview - **Company**: Veracyte - **Industry**: Life Sciences, specifically focused on molecular diagnostics for cancer Key Points and Arguments 2025 Performance and Growth - Veracyte reported strong growth in its core business, with Decipher growing by **32%** year-to-date and Afirma by **9%** in volume terms, exceeding expectations for Decipher and meeting expectations for Afirma [3][4] - The company launched a metastatic product for Decipher and an internal V2 transcriptome product, enhancing lab capabilities and cost efficiency [3][4] - Enrollment for the Nightingale study was completed with **2,400 patients**, marking progress in long-term growth drivers [3][4] Market Penetration Strategies - Decipher holds a **65%** market share in prostate cancer, with the market being approximately **40%** penetrated [6] - Strategies to increase penetration include leveraging NCCN level one guidelines and expanding data-driven insights to support clinical evidence [6][7] - The company aims to bridge the gap in covered lives for Decipher, which currently has **200 million** covered lives compared to Afirma's **275 million** [8][9] Metastatic Product Launch - Early feedback on the metastatic product launch has been positive, with strong interest from physicians [16] - The Stampede publication is expected to significantly impact the metastatic indication, helping to identify patients who will benefit from treatment [5][24] Afirma and Thyroid Cancer - Afirma is currently at **65%** market penetration, with plans to reach **80%** through continued evidence generation and the launch of the GRID research tool [26][27] - The company does not foresee a need for significant expansion of the sales force, as current teams are effectively managing territories [28] Future Product Launches - The Percepta nasal swab test for lung cancer is expected to address a significant market, with approximately **2 million** patients potentially benefiting from the test [39][40] - Prosigna is targeted for launch in early to mid-2026, focusing on the U.S. breast cancer market, which has around **225,000** patients annually [43][44] MRD Market Entry - Veracyte plans to launch its MRD test in the first half of 2026, starting with muscle invasive bladder cancer, leveraging its existing urology channel [46][48] - The company is focused on obtaining reimbursement for the MRD test, which is expected to reflect the true value of the approach [48] International Strategy - Veracyte aims to expand its presence in international markets, particularly in Europe, where there is a larger patient population that could benefit from its tests [56][57] - The company plans to launch tests as IVDs and navigate reimbursement on a country-by-country basis [57] Financial Outlook - The adjusted EBITDA margin for 2025 has been raised to **23.5%**, with a long-term target of **25%** [59] - The company is focused on maintaining profitability while investing in growth opportunities to serve more patients [60] Investor Engagement - The management encourages investors to focus on the long-term growth drivers and the positive pipeline developments rather than solely on competitive pressures [71][72] Additional Important Content - The company emphasizes the importance of data generation and evidence in driving adoption and clinical utility of its tests [29][52] - Veracyte's approach to capital allocation is becoming more offensive, with a focus on high-quality assets that align with its strategic goals [66][67]

Group 1 - The article discusses the author's previous positive assessment of Veracyte (NASDAQ: VCYT) nearly five years ago, highlighting the company's ability to navigate the challenges posed by the pandemic [1] - The author expresses a long position in VCYT shares, indicating a personal investment interest in the company [2] - The article emphasizes the author's focus on innovative companies in the biotech sector that are developing breakthrough therapies and pharmaceuticals [1]

Group 1 - The stock of Veracyte, Inc. (VCYT) is experiencing significant attention due to high implied volatility in the options market, particularly the Sep 19, 2025 $45.00 Put option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant change in Veracyte's stock price, potentially due to an upcoming event [2] - Currently, Veracyte holds a Zacks Rank 3 (Hold) in the Medical - Instruments industry, which is in the bottom 36% of the Zacks Industry Rank, with recent earnings estimates being revised downward [3] Group 2 - The high implied volatility surrounding Veracyte may indicate a developing trading opportunity, as options traders often seek to sell premium on such options to capitalize on decay [4]

Core Insights - Veracyte, Inc. (VCYT) reported second-quarter 2025 adjusted earnings of 44 cents per share, a significant increase of 46.7% from 30 cents in the same period last year, exceeding the Zacks Consensus Estimate by 41.9% [1][7] - The company's revenues rose 13.8% year over year to $130.2 million, surpassing the Zacks Consensus Estimate by 7.1% [2][7] Revenue Breakdown - Testing revenues reached $122.3 million, reflecting a 14% year-over-year increase, driven by Decipher and Afirma revenue growth of 24% and 5%, respectively [3] - Product revenues decreased by 8% year over year to $3.6 million [3] - Biopharmaceutical and other revenues increased by 21% to $4.3 million compared to the prior-year quarter [3] Margins and Expenses - Total cost of revenues was $37.7 million, up 12.3% year over year [4] - Gross profit increased by 14.4% to $92.4 million, with gross margin expanding by 38 basis points to 71% [4] - Selling and marketing expenses rose 4.5% to $25.3 million, while general and administrative expenses increased by 1.8% to $32.3 million [4] - R&D expenses totaled $16.3 million, down 1.2% year over year [4] - Adjusted operating margin improved by 689 basis points to 14.2% [4] Cash and Capital Structure - Veracyte ended Q2 2025 with cash and cash equivalents of $219.5 million, up from $186.1 million at the end of Q1 [5] - Cumulative net cash from operating activities was $39 million, compared to $20.6 million a year ago [5] Guidance - The company raised its full-year 2025 testing revenue guidance to a range of $477-$483 million, indicating a year-over-year growth of 14% to 15% [6] - Total revenue guidance for 2025 was also increased to $496-$504 million, implying 11% to 13% year-over-year growth [8] - Adjusted EBITDA as a percentage of revenues is anticipated to be approximately 23.5%, up from the previous guidance of 22.5% [8] Notable Developments - The launch of Decipher Prostate Metastatic Genomic Classifier for patients with advanced prostate cancer was a significant development in Q2 [10]

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q%20Filing%20Information) [Registrant Details](index=1&type=section&id=Registrant%20Details) Veracyte, Inc.'s Form 10-Q filing details include incorporation state, executive offices, and Nasdaq-registered securities - Veracyte, Inc. filed its Quarterly Report on Form 10-Q for the period ended **June 30, 2025**[2](index=2&type=chunk) - The company is incorporated in **Delaware** with headquarters in **South San Francisco, California**[2](index=2&type=chunk) Registered Securities | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Common Stock, par value, $0.001 per share | VCYT | The Nasdaq Stock Market LLC | [Filer Status and Compliance](index=1&type=section&id=Filer%20Status%20and%20Compliance) Veracyte, Inc. confirms SEC filing compliance, classified as a **'large accelerated filer'** with all reports submitted - The registrant has filed all required reports under Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding **12 months**[3](index=3&type=chunk) - The registrant has submitted every Interactive Data File required by Rule 405 of Regulation S-T during the preceding **12 months**[3](index=3&type=chunk) Filer Status Classification | Large accelerated filer | x | | :---------------------- | :-| | Non-accelerated filer | ¨ | | Accelerated filer | ¨ | | Smaller reporting company | ☐ | | Emerging growth company | ☐ | [Outstanding Shares](index=2&type=section&id=Outstanding%20Shares) As of **August 1, 2025**, Veracyte, Inc. had **78,671,588** shares of common stock outstanding - As of **August 1, 2025**, **78,671,588** shares of common stock, par value **$0.001** per share, were outstanding[5](index=5&type=chunk) [Special Note Regarding Forward-Looking Statements](index=4&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) [General Statement](index=4&type=section&id=General%20Statement) The Form 10-Q contains forward-looking statements, projections about future events, strategy, and financial position - The report contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995[11](index=11&type=chunk) - These statements concern business strategy, future operating results, financial position, objectives, and expectations[11](index=11&type=chunk) - Forward-looking statements are based on current expectations and projections about future events and trends[13](index=13&type=chunk) [Specific Forward-Looking Statements](index=4&type=section&id=Specific%20Forward-Looking%20Statements) Forward-looking statements cover financial results, test volumes, expenses, macroeconomic impacts, product development, acquisitions, and regulations - Expectations include total revenue and test volume, future R&D, G&A, and S&M expenses, and anticipated uses of funds[14](index=14&type=chunk) - The company anticipates impacts from inflation, volatile interest rates, foreign exchange fluctuations, regional conflicts, and supply chain disruptions[14](index=14&type=chunk) - Statements cover the timing and success of transitioning to IVD tests globally, ability to integrate acquisitions, and obtaining and maintaining payer reimbursement[14](index=14&type=chunk) [Disclaimer](index=4&type=section&id=Disclaimer) Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially, with no obligation to update - Forward-looking statements are subject to risks, uncertainties, and assumptions, as described in the 'Risk Factors' section[13](index=13&type=chunk) - Actual results could differ materially from projections, and reliance on these statements as predictions is cautioned against[13](index=13&type=chunk) - The company disclaims any obligation to publicly update or revise forward-looking statements, except as legally required[15](index=15&type=chunk) [PART I. — FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section presents Veracyte, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income, stockholders' equity, cash flows, and related notes [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) - Total assets increased by **$44.07 million** from December 31, 2024, to June 30, 2025[18](index=18&type=chunk) - Stockholders' equity increased by **$45.09 million** over the six-month period[18](index=18&type=chunk) Assets and Liabilities (in thousands) | Assets (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $219,499 | $239,087 | | Short-term investments | $101,220 | $50,354 | | Total current assets | $414,681 | $372,267 | | Total assets | $1,344,104 | $1,300,035 | | Total current liabilities | $76,433 | $78,633 | | Total liabilities | $123,047 | $124,069 | | Total stockholders' equity | $1,221,057 | $1,175,966 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) - Total revenue increased by **13.75%** for the three months and **15.79%** for the six months ended June 30, 2025, year-over-year[20](index=20&type=chunk) - The company reported a net loss of **$0.98 million** for the three months ended June 30, 2025, due to a **$20.5 million** asset impairment[20](index=20&type=chunk) Consolidated Statements of Operations (in thousands, except per share) | (in thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $130,164 | $114,428 | $244,637 | $211,272 | | Gross profit | $89,769 | $77,913 | $169,277 | $140,381 | | Income (loss) from operations | $(5,268) | $4,606 | $(2,364) | $(50) | | Net income (loss) | $(980) | $5,734 | $6,067 | $3,870 | | Basic EPS | $(0.01) | $0.07 | $0.08 | $0.05 | | Diluted EPS | $(0.01) | $0.07 | $0.08 | $0.05 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) - Net comprehensive income significantly increased for both the three and six months ended June 30, 2025, driven by positive currency translation adjustments[23](index=23&type=chunk) Consolidated Statements of Comprehensive Income (Loss) (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $(980) | $5,734 | $6,067 | $3,870 | | Change in currency translation adjustments | $16,682 | $(1,703) | $24,131 | $(6,592) | | Net comprehensive income (loss) | $15,702 | $4,031 | $30,198 | $(2,722) | [Condensed Consolidated Statements of Stockholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) - Total stockholders' equity increased from **$1,175.97 million** at December 31, 2024, to **$1,221.06 million** at June 30, 2025[26](index=26&type=chunk) - Key drivers include net income of **$6.07 million**, other comprehensive income of **$24.13 million**, and stock-based compensation expense of **$21.47 million**[26](index=26&type=chunk) Consolidated Statements of Stockholders' Equity (in thousands) | (in thousands) | Balance at Dec 31,

Core Insights - Veracyte reported Q2 2025 results, exceeding expectations in both revenue and profitability, primarily due to growth in its prostate cancer genomic testing platform [1][5] - The company raised its full-year 2025 revenue guidance to $496 million to $504 million, indicating strong performance in its testing business [1][12] Financial Performance - Q2 2025 GAAP revenue was $130.2 million, surpassing the analyst estimate of $121.04 million, representing a 14% year-over-year increase [2][5] - Non-GAAP EPS for Q2 2025 was $0.44, significantly higher than the expected $0.26, marking a 46.7% increase from the previous year [2][5] - Adjusted EBITDA rose 49% year-over-year to $35.8 million, reflecting a 27.5% margin [2][7] Testing Revenue and Volume - Testing revenue reached $122.3 million, a 14.3% increase from Q2 2024, with total test volumes growing 18% to 42,441 [2][5] - The Decipher Prostate genomic classifier generated $76.3 million in revenue, up 24%, benefiting from broader adoption among physicians [5][9] - Afirma genomic test revenue was $43.4 million, a 5% increase, with volume growth of 8% compared to the same period in 2024 [6][9] Strategic Focus and Market Expansion - Veracyte is focusing on expanding into new cancer testing markets, particularly minimal residual disease (MRD) monitoring, and enhancing its international IVD product reach [4][10] - The company aims to optimize laboratory efficiency and secure payer reimbursement to support growth in its testing business [4][10] Operational Developments - The company completed the sale of its French manufacturing subsidiary, incurring a $20.5 million impairment charge, which is expected to impact future revenues [11] - Cash flow from operating activities for the first half of 2025 was $39.0 million, an increase of $18.4 million compared to the same period in 2024, with strong liquidity of $320.7 million [8] Future Outlook - Management projects total revenue for FY2025 to be between $496 million and $504 million, reflecting an 11-13% increase from the previous year [12] - The company anticipates adjusted EBITDA margin to reach 23.5% for FY2025, up from the prior outlook of 22.5% [12][13]

Company Performance - Veracyte reported quarterly earnings of $0.44 per share, exceeding the Zacks Consensus Estimate of $0.31 per share, and up from $0.30 per share a year ago, representing an earnings surprise of +41.94% [1] - The company achieved revenues of $130.16 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 7.06%, compared to $114.43 million in the same quarter last year [2] - Over the last four quarters, Veracyte has consistently surpassed consensus EPS and revenue estimates [2] Stock Performance - Veracyte shares have declined approximately 36.8% since the beginning of the year, contrasting with the S&P 500's gain of 7.1% [3] - The current Zacks Rank for Veracyte is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.33 on revenues of $125.73 million, and for the current fiscal year, it is $1.32 on revenues of $493.72 million [7] - The outlook for the Medical - Instruments industry, where Veracyte operates, is currently in the bottom 41% of over 250 Zacks industries, which may impact the stock's performance [8]

Financial Data and Key Metrics Changes - The company reported total revenue of $130 million for Q2 2025, reflecting a 14% year-over-year growth [8][31] - Testing revenue also grew by 14% year-over-year, amounting to $122.3 million, driven by significant growth in Decipher and Afirma [31] - Adjusted EBITDA margin reached 27.5%, significantly exceeding expectations [9][35] - Non-GAAP gross margin was 71.5%, up approximately 30 basis points compared to the prior year [33] Business Line Data and Key Metrics Changes - Decipher tests delivered approximately 25,500 tests, achieving a year-over-year volume growth of 28% [10][11] - Afirma volume growth increased by 8% year-over-year, resulting in approximately 16,950 tests [17] - Prosigna is set to launch as an LDT in the U.S. breast cancer market in mid-2026, targeting a large patient population [21][22] Market Data and Key Metrics Changes - The company believes it holds a 65% market share in the prostate testing market, with Decipher positioned as the leading brand among clinicians [16] - The NCCN high-risk patient population is estimated to be approximately 25% of the incidence population, indicating a significant growth opportunity [13] Company Strategy and Development Direction - The company aims to transform cancer care globally through strategic initiatives focused on short-term, mid-term, and long-term growth drivers [9][29] - Plans include expanding the MRD testing platform and launching innovative products like the Percepta nasal swab for lung cancer [23][28] - The company is committed to geographic expansion and enhancing its research and development capabilities [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in Decipher's long-term growth trajectory, anticipating sustained double-digit growth driven by market penetration and share gains [16][55] - The company expects to generate approximately $13 million in savings compared to 2024 results, which will be reinvested in growth drivers [37] - The updated 2025 total revenue guidance is set at $496 million to $500 million, reflecting strong performance in the first half of the year [38] Other Important Information - The company has scanned over 90,000 slides from over 50,000 de-identified patients to support ongoing research in digital pathology [15][104] - The sale of the Veracyte SaaS manufacturing business was completed on August 1, allowing for continuity of supply for the Prosigna IVD [26][36] Q&A Session Summary Question: What are the key drivers for maintaining Decipher's growth? - Management highlighted market penetration, share gains, and digital pathology integration as key drivers for sustaining growth [45][49] Question: What is the expected growth contribution from the metastatic population for Decipher? - Management indicated that while the metastatic launch is promising, it is not expected to have a significant impact in 2025, with more substantial contributions anticipated in 2026 and beyond [58][65] Question: What milestones will drive greater adoption and revenue growth for Prosigna? - Key milestones include the mid-2026 launch, pivotal study results, and ongoing clinical studies to support the test [67][68] Question: How is the company approaching MRD testing? - The company plans to leverage its existing Decipher sales channel and cross-train sales representatives to target both academic and community oncology [79][80] Question: What feedback has been received regarding the digital pathology offering? - Initial feedback has been positive, with a focus on ensuring that digital pathology complements existing molecular diagnostics [100][102]