Veracyte — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue increased 15% year-over-year to $151.8 million for the quarter ended September 30, 2026, compared to $131.9 million in the same period in 2025.
• Testing revenue grew 15% to $146.4 million, driven by Decipher Prostate growth of 12% to $92.3 million and Afirma growth of 19% to $51.5 million.
• Product revenue increased 40% to $4.6 million, compared to $3.3 million in the prior year quarter.
• Total volume increased 15% to 52,744 tests, with testing volume rising 13% to 49,498 tests.
• GAAP net income was $31.5 million (20.8% of revenue), an increase of $12.4 million compared to the prior year quarter.
• Diluted GAAP net earnings per share were $0.38, an improvement of $0.14 compared to $0.24 in the prior year quarter.
• Non-GAAP diluted net earnings per share were $0.51, flat compared to the prior year quarter.
• Adjusted EBITDA was $41.2 million (27.2% of revenue), a 4% increase compared to the prior year quarter.
• Non-GAAP gross margin was 74%, compared to 73% in the prior year quarter; GAAP gross margin was 71% compared to 69%.
• Non-GAAP operating expenses grew 24% to $72.9 million compared to $58.6 million in the prior year quarter.
• Cash from operations for the quarter was $40.3 million.
• Cash, cash equivalents, and short-term investments totaled $370.5 million as of September 30, 2026.
• Net cash provided by operating activities for the first nine months of 2026 was $121.3 million, an improvement of $37.6 million compared to the same period in 2025.

Guidance and Future Outlook:

• Veracyte expects 2026 total revenue to be between $590 million and $593 million, representing 14% to 15% growth, revised down from prior guidance of $590 million to $596 million.
• The company expects 2026 testing revenue to be between $571 million and $573 million, representing 16% growth, revised down from prior guidance of $576 million to $582 million.
• The company expects adjusted EBITDA margin to be greater than 26% for the full year 2026.
• Management noted that revenue contribution from recently launched tests is expected to be minimal.

Business Segments and Product Lines:

• Decipher Prostate volume was below expectations for the quarter, though it drove 12% revenue growth.
• Afirma outperformed expectations, contributing to 19% revenue growth.
• Prosigna IVD adoption was strong following the release of phase III OPTIMA trial results at ASCO.
• The company acquired Convergent Genomics, Inc., expanding its urology portfolio with a urinary tumor DNA testing platform for bladder cancer care.
• Medicare reimbursement was secured for the Prosigna Breast Risk of Recurrence (ROR) test in the U.S. for eligible patients with early-stage hormone-receptor positive breast cancer.
• New predictive evidence was released supporting the use of the Decipher Prostate test for treatment intensification decisions in intermediate-risk and very high-risk prostate cancer.
• The company surpassed a milestone of serving more than 1 million patients to date with its tests.

Market and Competitive Landscape:

• The company highlighted evidence-based catalysts to support growth in its core franchises (Afirma, Decipher) and advancing strategies for breast and bladder cancer.
• Strong adoption of Prosigna IVD was driven by clinical trial results presented at ASCO.

Risks and Challenges:

• Decipher Prostate volume was below expectations for the quarter.
• The press release includes standard forward-looking statement risks regarding product launch, commercialization, reimbursement, acquisition integration (including Convergent Genomics and C2i Genomics), and external factors such as geopolitical conflicts, foreign currency fluctuations, and legislative changes.

Management Commentary and Tone:

• CEO Marc Stapley described the results as "solid," citing strong profitability and cash generation.
• Management expressed confidence in the long-term outlook, noting a differentiated financial profile that enables continued investment in the business.
• The tone emphasized executing on opportunities to drive long-term growth while advancing breast and bladder strategies.

Other Key Points:

• The Board of Directors authorized a new share repurchase program for up to $100 million of common stock.
• The repurchase program may be executed through open market purchases, privately negotiated transactions, or other methods, and will expire after 12 months.
• The company funds the repurchase program from available cash and cash equivalents.
• A conference call and webcast were held on November 4, 2026, at 4:30 p.m. Eastern Time to discuss results.