• Q4 Revenue: $118.6 million, a 21% increase year-over-year.
• Full Year Revenue: $446 million, a 23% increase year-over-year.
• Testing Revenue: $112.2 million in Q4, a 24% increase year-over-year.
• Adjusted EBITDA Margin: 20.6% for the full year 2024.
• Cash Generation: Over $70 million for the full year 2024.
• Decipher Volume Growth: 45% year-over-year in Q4.
• Afirma Volume Growth: 8% year-over-year in Q4.
• Testing ASP: Approximately $2,875 in Q4.
• Non-GAAP Gross Margin: 69.3% in Q4.
• GAAP Net Income: $5.1 million in Q4.
• Cash and Cash Equivalents: $289.4 million at the end of 2024.
• 2025 Testing Revenue Guidance: $470 million to $480 million, 12% to 15% growth year-over-year.
• 2025 Adjusted EBITDA Margin Guidance: Improvement by approximately 100 basis points.

• Warning! GuruFocus has detected 3 Warning Sign with VCYT.

Release Date: February 24, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Veracyte Inc (NASDAQ:VCYT) achieved a record year in 2024 with a total revenue of $446 million, marking a robust growth of 23% year-over-year.
• The company's testing revenue, which constitutes nearly 95% of its business, grew by 28% year-over-year, demonstrating strong demand for its products.
• Decipher's market leadership was further solidified with a 36% volume growth, delivering over 80,000 tests in 2024.
• Afirma's volume growth was strong, increasing by 12% in 2024, with significant revenue growth in Bethesda V and VI categories.
• Veracyte Inc (NASDAQ:VCYT) maintained a best-in-class financial profile with a full-year adjusted EBITDA margin of 20.6% and generated over $70 million in cash.

Negative Points

• Veracyte Inc (NASDAQ:VCYT) faces potential operational challenges with its French subsidiary, Veracyte SAS, which may lead to bankruptcy proceedings if a buyer is not found.
• The company experienced a decline in product revenue, down 18% year-over-year, due to supply and manufacturing challenges with Prosigna.
• Biopharmaceutical and other revenue decreased by 17% year-over-year, reflecting challenges in this segment.
• Non-GAAP gross margin decreased by approximately 130 basis points compared to the prior year period, impacted by lower prior period collections.
• The potential changes in the French entity could impact Veracyte Inc (NASDAQ:VCYT)'s timelines for international expansion and development roadmaps.

Q & A Highlights

Q: How is Veracyte balancing potential investments in growth with the need to improve margins and cash flow in 2025? A: Marc Stapley, CEO, explained that Veracyte is in a strong position due to its core testing business, particularly Decipher and Afirma. The company is focused on long-term growth drivers, including international expansion and MRD platform development. They are also considering further investments in France, which could create opportunities for other investments. The company is committed to focusing on investments that will drive positive ROI over the next few years.

Q: What factors are contributing to Afirma's expected high single-digit growth in 2025? A: Rebecca Chambers, CFO, stated that the growth is primarily driven by volume, with competitive advantages, incidence growth, and share gains being key factors. There is not a significant ASP tailwind assumed in the guidance for Afirma.

Q: Can you provide more details on the expected revenue from the metastatic indication for Decipher in 2025? A: Marc Stapley, CEO, mentioned that the metastatic indication represents about 30,000 new incidences annually. The company is focused on launching the test correctly in the second half of 2025, with a ramp-up expected as the sales team educates customers. The guidance assumes a relatively small contribution from metastatic in the first two quarters of launch.

Q: How does Veracyte view the market opportunity for the NIGHTINGALE study and nasal swab test? A: Marc Stapley, CEO, stated that the market opportunity remains vast, with lung cancer being a major cause of cancer-related deaths. The NIGHTINGALE study aims to demonstrate the clinical utility of the nasal swab test, and the company is focused on completing enrollment, analyzing results, and securing reimbursement before launching the test.

Q: What is Veracyte's approach to MRD testing, and how does it plan to address reimbursement challenges? A: Marc Stapley, CEO, explained that Veracyte's MRD approach uses whole genome sequencing, which they believe is the best approach for detecting cancer earlier than imaging. The company plans to submit a technical assessment to MolDx and is actively engaging with them on reimbursement. They are focused on launching the test with appropriate pricing and managing COGS to achieve a suitable gross margin.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.