Veracyte Stock Gains on Q1 Earnings and Revenue Beat, Gross Margin Up

Core Insights - Veracyte, Inc. reported a significant increase in first-quarter 2025 earnings, with earnings per share (EPS) of 31 cents, a 63.2% improvement from 19 cents in the same period last year, and exceeding the Zacks Consensus Estimate by 55% [1] - The company achieved revenues of $114.5 million, reflecting an 18.3% year-over-year increase, surpassing the Zacks Consensus Estimate by 3.2% [2] - The company reaffirmed its full-year 2025 testing revenue guidance, expecting revenues between $470 million and $480 million, indicating a 12-15% year-over-year growth [7] Financial Performance - Adjusted EPS was reported at 9 cents, compared to a loss of 2 cents per share in the prior year [1] - Testing revenues reached $107.3 million, a 19% increase year-over-year, driven by Decipher and Afirma revenue growth of 33% and 6%, respectively [2] - Gross profit rose by 27.3% to $79.5 million, with gross margin expanding by 495 basis points to 69.5% [4] Cost and Expenses - Total cost of revenues was $35 million, up 1.7% year-over-year [4] - Selling and marketing expenses increased by 2.8% to $24.4 million, while general and administrative expenses rose by 29% to $33.8 million [5] - Research and development expenses totaled $17.7 million, an 11% increase year-over-year [5] Cash and Solvency - At the end of Q1 2025, Veracyte had cash and cash equivalents of $186.1 million, down from $239.1 million at the end of Q4 2024 [6] - The net cash provided from operating activities was $5.4 million, compared to a net cash used of $9 million in the previous year [6] Strategic Developments - The company launched Decipher for metastatic prostate cancer patients and published analytical validity data for the Percepta Nasal Swab during the first quarter [10] - The growth in product revenues and biopharmaceutical revenues, which also increased by 19% to $3.6 million, is seen as encouraging [3]