Veracyte Q1 Earnings Call Highlights

Key Points

• Veracyte posted Q1 revenue of $139.1 million, up 21% year‑over‑year, with GAAP net income of $28.7 million and adjusted EBITDA of $42.8 million (30.8% of revenue), and it raised full‑year 2026 revenue guidance to $582–$592M with adjusted EBITDA >26%.
• Decipher and Afirma drove volume growth (Decipher ~28,000 tests, +24% YoY; Afirma ~17,200, +12%), with Decipher showing ~30% growth in high‑risk prostate categories and advancing multiple phase III trials, while Veracyte remains on track to launch Prosigna LDT mid‑year and TrueMRD (MIBC) by the end of Q2.

Veracyte NASDAQ: VCYT reported first-quarter 2026 results that management said marked an “excellent start” to the year, driven by double-digit growth in both revenue and test volume, improved profitability and progress toward two major product launches planned for later in 2026.

Marc Stapley, Veracyte’s chief executive officer, said the quarter reflected “years of disciplined execution” that have made the company “a diversified, profitable company with a unique platform, multiple growth drivers, expanding clinical evidence, and strong clinician relationships.”

First-quarter results and updated 2026 outlook

Rebecca Chambers, Veracyte’s chief financial officer, said total revenue was $139.1 million, up 21% year-over-year, with total volume of approximately 47,600 tests, up 17% from the prior-year period. Testing revenue was $135.1 million, an increase of 26%, and testing volume was approximately 45,200 tests, up 19%.

Chambers said testing average selling price (ASP) was $2,986, up 6% year-over-year and inclusive of approximately $4 million of prior period collections (PPCs). Excluding PPCs, normalized ASP increased 3% to $2,900, which she attributed to “continued strong collections.”

On profitability, Chambers said Veracyte delivered GAAP net income of $28.7 million. Adjusted EBITDA was $42.8 million, or 30.8% of revenue, which she said was “well above our long-term target of 25%.” Non-GAAP gross margin was 75.7%, up 350 basis points year-over-year, while non-GAAP operating expenses rose 7% to $64.6 million.

The company generated $35.2 million of cash from operations and ended the quarter with $439.1 million in cash, cash equivalents and short-term investments, according to Chambers.

Veracyte raised its full-year 2026 guidance. Chambers said the company now expects total revenue of $582 million to $592 million, up from a prior range of $570 million to $582 million. She said the outlook reflects expected testing revenue growth of 16% to 18% excluding contributions from new tests, with Decipher revenue growth of approximately 20% and Afirma growth in the “high single-digit to low double-digit” range. Chambers added that guidance excludes potential prior period collections in future quarters. Veracyte also increased its full-year adjusted EBITDA guidance to greater than 26%.

Decipher growth continues, with traction in advanced disease

Stapley said Decipher delivered approximately 28,000 tests in the quarter, representing 24% year-over-year volume growth. He attributed the performance to expansion in ordering providers and orders per physician, and he emphasized Decipher’s evidence base and inclusion in National Comprehensive Cancer Network (NCCN) guidelines.

Stapley also highlighted growth in advanced disease, saying the company delivered “nearly 30% growth across high-risk categories, including radical prostatectomy, biochemical recurrence, and metastatic disease” in the first quarter.

He pointed to several evidence-generation efforts, including upcoming ENZAMET phase III trial results assessing Decipher’s ability to identify metastatic patients who benefit from triplet therapy, which he said would be featured in an oral presentation at ASCO later in the month. Stapley also said four phase III trials evaluating Decipher Prostate in treatment intensification and de-intensification have completed enrollment, including the GUIDANCE trial, which he said reached that milestone in the first quarter “meaningfully ahead of schedule” and includes more than 2,000 patients.

During Q&A, Stapley said he did not see “any reason why” Decipher volume growth would slow, citing that only about one-third of U.S. prostate cancer patients are currently benefiting from the test’s insights. Chambers added she was “quite excited about the ENZAMET trial” for the metastatic population.

Stapley also discussed investments in digital pathology and AI-powered analysis as complementary tools. He said the company is “close to digitizing all historical slides for U.S. patients,” totaling more than 350,000 images, and plans to use the dataset with whole transcriptome data in collaborations with academic centers.

Afirma volumes rise as workflow change improves “no result” rate

Afirma delivered approximately 17,200 tests in the first quarter, up 12% year-over-year, according to Stapley. He said the company’s transition to its V2 transcriptome workflow, completed in the fourth quarter, improved scalability and the ability to deliver definitive results for historically challenging low-input RNA samples.

Stapley said the company’s “no result rate” improved sequentially and year-over-year, and that the improvement contributed approximately 400 basis points to Afirma volume growth in the quarter because more patients and physicians received actionable results.

In response to an analyst question, Chambers said the 400-basis-point benefit in the quarter was “about as good as it’s going to get.” For the full year, she said Veracyte is assuming a 2% to 3% benefit from improvements in the no result rate, citing seasonal impacts in summer months and a comparison to fourth-quarter 2025 when the transition began. She also noted the company’s original guidance assumed a 0% to 2% benefit, which has now been updated alongside the higher Afirma growth expectations.

Stapley also cited an independent study analyzing Medicare payment data from 2016 to 2023 that found increased adoption of Afirma was associated with a reduction in thyroid surgery rates among Medicare beneficiaries, which he said supported Afirma’s position as the leading molecular test for indeterminate thyroid nodules.

Upcoming launches: Prosigna LDT and TrueMRD

Stapley said Veracyte is “on the cusp” of two major product launches: Prosigna LDT and TrueMRD.

For Prosigna LDT, Stapley said the test is built on the PAM50 signature and is intended to inform treatment decisions for early-stage hormone receptor-positive breast cancer patients by reporting risk of recurrence, intrinsic subtype and proliferation scores. He said Veracyte sees an opportunity in the U.S. market, where approximately 225,000 breast cancer patients are diagnosed annually with eligible disease.

Stapley said results from OPTIMA, a phase III randomized prospective trial enrolling approximately 4,500 patients, were confirmed for presentation at ASCO later in the month, and that if positive, they could be “practice-changing.” He said the company remains on track to commercially launch Prosigna LDT by mid-year and is scaling its commercial and medical science liaison teams.

During Q&A, John Leite, Veracyte’s chief commercial officer, said the “bar is quite high” for OPTIMA and that it would require a positive outcome on the primary endpoint demonstrating non-inferiority against the control for a predictive claim. He said Veracyte believes it needs those data to support Level 1A evidence and potential guideline inclusion. Asked about timing relative to NCCN breast cancer guideline review, Stapley said publication could potentially occur before an August panel meeting, but that whether it would influence guidelines was uncertain; Leite said it was possible but “purely speculative.” Chambers added the company is building its team, and if OPTIMA reads out positively with guideline inclusion and publication, Veracyte could become “more aggressive,” which she characterized as potentially “an exiting the year sort of decision.”

For TrueMRD, Stapley said Veracyte remains on track to launch the whole genome sequencing-based MRD platform in muscle-invasive bladder cancer (MIBC) by the end of the second quarter, initially focused on recurrence monitoring after curative-intent therapy. He said the company plans to leverage the Decipher brand and established commercial channels in urology and radiation oncology, where it believes 70% of MIBC patients are seen.

Stapley outlined a broader TrueMRD evidence pipeline and said the company has more than 10 studies in testing or analysis, 12 in contracting and 29 in active planning across multiple cancers and immunotherapy response. Asked about the next commercial indication beyond MIBC, Stapley said the company will revisit priorities in a summer strategic planning process, but provided “no new updates” on the next launch timing, emphasizing the focus on the MIBC launch and reimbursement coverage.

Operational changes and capital allocation commentary

Chambers said certain IT expenses associated with software development and project management previously reported in G&A were moved into R&D following the addition of a new Chief Development and Technology Officer, reflecting that those costs are dedicated to product development objectives. As a result, R&D expense increased $8.5 million year-over-year to $24.1 million, while G&A expense decreased $6.6 million to $15.8 million. Sales and marketing expense increased $2.2 million to $24.7 million, reflecting hiring and investments to support the portfolio and prepare for Prosigna LDT and TrueMRD launches.

On capital allocation, Stapley said the company remains active in business development but “quite discerning,” focusing on assets that fit Veracyte’s oncology strategy and “whole data driven strategy,” while also considering whether potential transactions would be dilutive to its financial profile.

About Veracyte NASDAQ: VCYT

Veracyte, Inc is a genomic diagnostics company focused on improving diagnostic accuracy and patient care through advanced molecular testing. Founded in 2008 and headquartered in South San Francisco, California, the company develops and commercializes minimally invasive genomic tests that aid in the diagnosis of thyroid, lung and other diseases. Veracyte's proprietary platform analyzes gene expression patterns in clinical samples to help physicians make more informed treatment decisions, reducing unnecessary surgeries and improving patient outcomes.

The company's flagship product, the Afirma Genomic Sequencing Classifier, is designed to assess thyroid nodules with indeterminate cytology, helping clinicians distinguish benign from suspicious nodules.

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