What Veracyte (VCYT) Said on Its Q3 Earnings Call

Veracyte NASDAQ: VCYT reported 15% revenue growth for the third quarter of 2026, but lowered its near-term expectations for its Decipher Prostate test after volume came in below management’s forecast. The company also outlined a preliminary 2027 outlook for mid-single-digit revenue growth as it invests in its commercial teams and expands its cancer testing portfolio.

Third-quarter revenue rose to $151.8 million, while total test volume increased 15% to approximately 52,700. GAAP net income was $31.5 million, and adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, reached $41.2 million, representing 27.2% of revenue.

Chief Executive Officer Marc Stapley said the company’s Afirma thyroid test exceeded expectations, while Decipher Prostate volume fell approximately 1,000 tests short of its forecast. Veracyte delivered nearly 30,000 Decipher Prostate tests during the quarter, up 12% from a year earlier.

Decipher growth outlook reset

Stapley attributed the Decipher shortfall to several factors, including a normalization of physician adoption after earlier favorable guideline updates. He also cited a 2026 guideline change affecting genetic classifiers and MMAI tests in low-risk prostate cancer, as well as more low-risk patients choosing active surveillance without further testing.

In addition, Stapley said emerging technologies such as digital pathology are drawing physician attention and requiring sales representatives to spend more time explaining how molecular testing differs from and can complement those tools.

Veracyte now expects Decipher Prostate annual volume to increase by 12,000 to 15,000 tests, with the low end serving as a reasonable floor for now. Chief Financial Officer Rebecca Chambers said the company’s preliminary 2027 outlook assumes growth near the 12,000-test level.

During the question-and-answer session, Stapley said Decipher was still adding customers and gaining share, despite slower growth. Chief Commercial Officer John Leite said new ordering physicians were the more important driver of growth and that orders per physician had remained fairly stable over recent quarters.

To support Decipher and its broader urology portfolio, Veracyte plans to expand its urology team by approximately 30% next year, including field representatives, medical science liaisons and sales leadership. Stapley said part of that investment will support bladder cancer products as well as Decipher Prostate.

2026 guidance narrowed; 2027 growth expected to slow

Veracyte narrowed its full-year 2026 revenue forecast to $590 million to $593 million, compared with its previous range of $590 million to $596 million. It lowered its testing revenue forecast to $571 million to $573 million from $576 million to $582 million.

The revised outlook assumes approximately 16% Decipher Prostate revenue growth for the year. Chambers said fourth-quarter Decipher volume is expected to be roughly flat sequentially, partly because the quarter has two fewer selling days.

For Afirma, Veracyte raised its full-year revenue growth expectation to approximately 16% from 12% to 14%. The company delivered approximately 19,000 Afirma tests in the third quarter, up 12% year over year. Stapley said a workflow that reduced the rate of tests without a result contributed approximately 3 percentage points to Afirma’s quarterly volume growth.

For 2027, the company preliminarily expects approximately 10% total volume growth, mid-single-digit revenue growth and an adjusted EBITDA margin of approximately 22%. Chambers said the first quarter would be the low point for margins because of expense timing, with the company expecting to exit the year at approximately 25%.

Chambers said the gap between expected volume and revenue growth reflects prior-period collections included in 2026 results and a changing revenue mix, including lower expected average selling prices for newer tests. Veracyte typically excludes prior-period collections from guidance because their timing and magnitude are uncertain.

The company generated $40.3 million in operating cash during the third quarter and ended the period with $370.5 million in cash, cash equivalents and short-term investments, after a $150 million cash payment for its acquisition of Convergent Genomics. Its board also authorized a share repurchase program of up to $100 million.

Breast and bladder tests remain longer-term opportunities

Veracyte recently launched its Prosigna laboratory-developed test in the United States and has secured Medicare reimbursement for certain eligible postmenopausal women with early-stage ER-positive breast cancer. Stapley said early demand has been encouraging, particularly in patient groups where the OPTIMA trial data were most differentiated.

Chambers cautioned that Prosigna and TrueMRD revenue contributions are expected to remain modest in 2027. For Prosigna, the company expects average selling prices in the near term to be roughly equivalent to the cost per test, reflecting limited coverage for its current patient mix and the time needed to establish commercial payer contracts.

In bladder cancer, the Convergent acquisition added UroAmp, a urine-based tumor DNA platform. Veracyte expects to launch its first UroAmp application in late 2028 with Medicare reimbursement. The company also launched its first TrueMRD test for recurrence monitoring in eligible patients with muscle-invasive bladder cancer earlier this year.

Stapley said Veracyte expects the bladder portfolio to build over time, beginning with broader adoption of Decipher Bladder in 2027 and more meaningful contributions from the portfolio in 2028 and beyond.

About Veracyte (NASDAQ:VCYT)

Veracyte, Inc is a diagnostics company that develops genomic tests to help physicians diagnose cancer, assess disease risk and guide treatment decisions. Its tests are designed to provide additional molecular information from patient samples, often helping reduce uncertainty and support more personalized care.

The company's portfolio includes Afirma tests for thyroid nodules, Decipher tests for prostate cancer, Percepta tests for lung cancer and Envisio tests for breast cancer. Veracyte also develops and commercializes additional genomic assays intended for use across various cancer types and clinical settings.

Founded in 2008 and headquartered in South San Francisco, California, Veracyte primarily serves the U.S.

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