Veracyte(US:VCYT)2019-07-30 20:27Financial Performance - Revenue for Q2 2019 was $30.1 million, a 32% increase year-over-year; excluding biopharmaceutical services revenue, revenue was $26.7 million, a 20% increase [105]. - Net loss for Q2 2019 was $2.5 million, a 60% improvement; net loss per share improved by 72% to $0.05 [105]. - Revenue increased by $7.4 million, or 32%, for the three months ended June 30, 2019, primarily due to a 26% volume increase in genomic classifiers [135]. - For the six months ended June 30, 2019, revenue increased by $16.9 million, or 39%, driven by a 29% volume increase in genomic classifiers [136]. - The net loss for the three months ended June 30, 2019, was $2.5 million, a reduction of 60% compared to a net loss of $6.2 million in the same period in 2018 [137]. - The company incurred a net loss of $4.4 million for the six months ended June 30, 2019, with an accumulated deficit of $238.5 million as of the same date [150]. Test Volume and Revenue Sources - Total genomic test volume increased by 26% year-over-year to 9,663 tests in Q2 2019 [105]. - The Percepta classifier test volume grew to 744 tests, with revenue exceeding $1.0 million, representing increases of 142% and 159%, respectively [105]. - The Envisia Genomic Classifier test volume increased by over 100% sequentially from Q1 2019, reaching 130 tests across 76 sites [107]. - Revenue from third-party payers for the three months ended June 30, 2019, included 26% from Medicare and 11% from UnitedHealthcare, totaling 37% of total revenue [124]. - The company recognized $3.2 million and $7.0 million of revenue from a diagnostics development agreement with Johnson & Johnson for the three and six months ended June 30, 2019, respectively, representing 10.6% and 11.7% of total revenue [124]. Expenses and Financial Management - Total operating expenses for the three months ended June 30, 2019, were $33.2 million, an increase of 16% compared to the same period in 2018 [137]. - Research and development expenses are expected to remain significant as the company continues to invest in developing additional products and evaluating various platforms [127]. - Selling and marketing expenses are anticipated to increase as the company expands its internal sales force and invests in its multi-product sales strategy [129]. - General and administrative expenses are expected to rise as the company builds its infrastructure, with approximately 66% of the average headcount in this category focused on billing and customer care [130]. - Selling and marketing expenses increased by $4.3 million, or 45%, for the three months ended June 30, 2019, compared to the same period in 2018 [142]. - General and administrative expenses rose by $1.0 million, or 17%, for the three months ended June 30, 2019, compared to the same period in 2018, with compensation expenses increasing primarily due to higher stock-based compensation [145]. Cash Flow and Financing - Cash used in operating activities for the six months ended June 30, 2019, was $3.5 million, with a net loss of $4.4 million including non-cash charges of $4.3 million in stock-based compensation [160]. - Cash provided by financing activities for the six months ended June 30, 2019, was $119.5 million, primarily from net proceeds of $137.8 million from a public offering [163]. - The company had cash and cash equivalents of $192.6 million as of June 30, 2019, which is expected to meet anticipated cash requirements for at least the next 12 months [151]. Market Risks and Accounting Standards - The company is exposed to market risks primarily related to interest rates under its Loan and Security Agreement [170]. - Significant changes in market rates may adversely affect the company's operating results [170]. - The adoption of ASC 842 resulted in the recognition of operating lease right-of-use (ROU) assets of $9.8 million and associated operating lease liabilities of $14.1 million [168]. - The company is currently evaluating the potential effect of ASU No. 2018-18 on its financial statements [169].