Veracyte Q2 Earnings Call Highlights

Key Points

• Veracyte reported strong Q2 results, with revenue up 15% to $150.3 million, testing revenue up 19% to $145.7 million, and adjusted EBITDA of $44 million. The company generated $45.8 million in operating cash flow and ended the quarter with $485.2 million in cash and short-term investments.
• The company raised its 2026 revenue outlook to $590 million–$596 million, representing 14%–15% growth, while maintaining its expectation for an adjusted EBITDA margin above 26%.
• Veracyte launched its Prosigna breast cancer test and TrueMRD bladder cancer recurrence-monitoring test; neither is included in current 2026 guidance. Core products also performed well, with Decipher Prostate revenue up 20% and Afirma revenue up 18%.

Veracyte NASDAQ: VCYT reported second-quarter 2026 revenue growth of 15% and raised its full-year revenue outlook, while highlighting the launches of its Prosigna LDT breast cancer test and TrueMRD recurrence-monitoring test for muscle-invasive bladder cancer.

Chief Executive Officer Marc Stapley called the quarter a milestone for the company, saying the new products expand Veracyte’s portfolio across the cancer-care continuum. The company also said it is approaching the milestone of serving its one millionth patient.

Total revenue was $150.3 million, up 15% from the prior-year period, while testing revenue increased 19% to $145.7 million, Chief Financial Officer Rebecca Chambers said. Total test volume rose 13% to about 51,000 tests, and testing volume increased 14% to 48,389 tests.

Veracyte generated $45.8 million in cash from operations during the quarter and ended the period with $485.2 million in cash equivalents and short-term investments. GAAP net income was $25.5 million, while adjusted EBITDA totaled $44 million, or 29.2% of revenue.

Revenue Guidance Raised

The company raised its 2026 total revenue guidance to a range of $590 million to $596 million, representing projected growth of 14% to 15%. Its prior outlook called for $582 million to $592 million in revenue.

Testing revenue is now expected to be between $576 million and $582 million, representing growth of 17% to 18%. The forecast includes about $10 million in other testing revenue from cytology services and Decipher Bladder.

Chambers said the company continues to expect adjusted EBITDA margin of more than 26% for the year, despite investments behind growth initiatives. She said the higher revenue outlook reflects stronger-than-expected average selling prices and prior-period collections, or PPCs.

• Testing average selling price was $3,010, up 4% year over year and including about $4.5 million in PPCs.
• Normalized testing ASP, excluding PPCs, increased 3% to about $2,900.
• Non-GAAP gross margin rose 340 basis points to 74.9%.
• Testing gross margin rose 200 basis points to 76%, supported by workflow efficiencies, higher ASP and PPCs.

Chambers said the company expects ASP to be slightly higher in 2026 than in 2025. However, she noted that Prosigna’s launch and reimbursement status could create a modest gross-margin headwind in the second half.

Prosigna and TrueMRD Launches

Veracyte launched its Prosigna LDT in the United States following presentation of results from the OPTIMA trial at the American Society of Clinical Oncology meeting. Prosigna is designed to help guide treatment decisions for patients with estrogen receptor-positive, HER2-negative breast cancer by assessing recurrence risk over 10 years and likelihood of chemotherapy benefit.

Stapley said the independent prospective Phase III OPTIMA trial enrolled more than 4,400 high-risk, early-stage breast cancer patients and met its primary endpoint. According to the company, the study showed that more than two-thirds of clinically high-risk patients may be able to avoid chemotherapy without compromising outcomes, including premenopausal women and patients with up to nine positive lymph nodes.

The company said it is engaged with more than 100 institutions, including academic cancer centers, integrated health systems and regional oncology networks, regarding Prosigna adoption. Stapley said some organizations are evaluating use of the test across their breast cancer programs.

During the question-and-answer session, Chief Commercial Officer John Leite said Prosigna has Medicare coverage through the company’s existing FDA-approved product. Veracyte is seeking a technical assessment for the centralized LDT version from MolDX, followed by pricing discussions. Leite said the company previously guided to pricing at the low end of about $2,500.

The company is expanding its sales force earlier than originally planned in response to demand and is investing in electronic health record integration. Chambers said Veracyte expects to expand the Prosigna sales force from roughly 10 people to 15 by year-end. The company’s 2026 guidance does not include revenue from Prosigna or TrueMRD.

Veracyte also launched TrueMRD for recurrence monitoring in muscle-invasive bladder cancer patients following radical cystectomy. The test secured Medicare reimbursement and is the company’s first commercial product on its minimal residual disease platform. Stapley said TrueMRD uses whole-genome sequencing for both the initial landmark test and subsequent surveillance testing.

Core Franchise Performance

Decipher Prostate revenue increased 20% year over year, driven primarily by 17% volume growth and improved ASP, Stapley said. The company processed just under 30,000 Decipher Prostate tests during the quarter.

Veracyte reduced its full-year Decipher volume expectation by approximately 1%, or slightly more than 1,000 tests, primarily due to lower expectations in low-risk disease. Stapley said most of that shortfall occurred during the second quarter and reflected changes to guidelines affecting active-surveillance testing rather than a loss of market share.

Management said Decipher’s intermediate- and high-risk prostate cancer segments continue to show strong growth, supported by clinical evidence and guideline positioning. The company expects about 31,000 Decipher tests in the third quarter and 33,000 in the fourth quarter, while maintaining its expectation for roughly 20% Decipher revenue growth for the full year.

Afirma delivered approximately 18,600 tests, representing 10% volume growth, while revenue rose 18%. The company attributed the performance to greater use among existing physicians, expansion of its ordering base, market-share gains, improved reimbursement and the V2 transcriptome workflow.

Stapley said the workflow reduced Afirma’s no-result rate and contributed approximately 400 basis points of volume growth during the quarter. Veracyte raised its full-year Afirma revenue growth outlook to approximately 12% to 14%, including an anticipated no-result-rate benefit of about 3% for the year.

Looking ahead, management said it plans to continue investing in evidence generation, product development, commercial execution and operational infrastructure. Stapley said the company sees opportunities for longer-term growth across Prosigna, TrueMRD, Decipher, Afirma and bladder cancer diagnostics.

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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