Veracyte (VCYT) Q4 FY25 earnings call: guidance and Q&A

Has conviction in 2026 guidance evolved, what drives high/low end, and what is the quarterly cadence?

Management reiterated strong conviction in 2026 guidance. Q1 is expected to be seasonally lower due to prior period collections (PPCs) not repeating and typical start-of-year expenses. High-end drivers include Afirma no-result rate benefit, potential PPCs, and Decipher volume outperformance. New product launches are not included in 2026 revenue guidance, as they are expected to be 2027 drivers.

“No, just a reminder that we're not -- in our guide for revenue, we're not guiding for the new product launches for a very simple reason that we expect those to be more of a revenue driver in 2027, but those, of course, aren't included in the guidance either.”

asked by Subhalaxmi Nambi · answered by Marc Stapley

What readout is required for OPTIMA to expand the intended use population for Prosigna, and how big would this market be?

Marc noted that Prosigna's current addressable market is about 225,000 of the 300,000 annual breast cancer patients. John explained OPTIMA includes enrollment criteria up to nine nodes, compared to Oncotype's three, and specific commentary on market expansion will depend on the trial results, expected at ASCO in June.

“OPTIMA has included in their enrollment criteria up to nine nodes. Currently, Oncotype is approved up to three. We'll have to see what the performance of the test ultimately will be with the OPTIMA trial results before we can provide very directed commentary on how we expect to leverage that data.”

asked by Subhalaxmi Nambi · answered by John Leite

Why is 2026 Adjusted EBITDA margin guided to 25% after achieving 27.6% in 2025, implying increased OpEx?

Management stated the 25% guidance provides flexibility to invest faster in new product launches and clinical evidence, especially for TrueMRD and Prosigna. Rebecca clarified that the 2025 margin included a $10 million PPC benefit not in 2026 guidance, and significant high-ROI investments are planned for new product introductions, software, bioinformatics, commercial resources, and customer service.

“I think you can see kind of the opportunity breadth of what we have in front of us is so high. It would almost be foolish not to do our best to invest these dollars.”

asked by Unknown Analyst · answered by Rebecca Chambers

Given Decipher's momentum and competitors investing more, what is the competitive space like for Decipher?

Marc stated Decipher has about 33% market penetration and has not seen any change in competitive dynamics, with strong growth driven by evidence and NCCN guidelines. Rebecca added that Veracyte's 2025 growth of 22,000 tests is comparable to competitors' total volumes, suggesting market share shifts between competitors rather than a direct impact on Veracyte.

“We haven't seen any change in the competitive dynamics or competitive environment at all. In fact, if you look at the way Decipher grew in 2025 and our guide going forward, it's continuing to represent very strong growth.”

asked by Unknown Analyst · answered by Marc Stapley

Is the implied $10M-$15M incremental investment enough to launch two new products and build a new sales force for breast cancer?

Marc clarified that the implied investment is 'room' for incremental spend if needed, and the baseline might be less. Prosigna requires about a dozen new sales reps, while MRD leverages the existing urology channel. The bulk of launch costs for clinical evidence is already in the run rate. Rebecca added that the actual year-over-year spend is significantly higher than $10M due to gross margin expansion.

“I mean -- and if anything, I would say, when you talk about the room, that might be room for us to add incremental spend if we need it. Remember what I said, if we want to -- we see an opportunity to go faster, we will absolutely want to be able to take that.”

asked by William Bonello · answered by Marc Stapley

What percentage of Decipher volume is bladder, and how is it expected to trend, especially with bladder-sparing data supporting neoadjuvant use?

Marc stated that bladder cancer currently represents a very small portion of total Decipher volume. He noted that more evidence, like the data presented at ASCO GU, is needed to drive clinical utility in the neoadjuvant setting. Phil explained that GU ASCO abstracts demonstrate how understanding bladder cancer subtypes can inform neoadjuvant therapy and bladder-sparing approaches, increasing interest in the test.

“Yes, Doug, I think your question is spot on. And so the way to think about the bladder in the numbers today, it's a very small portion of the total Decipher number that we talk about.”

asked by Douglas Schenkel · answered by Marc Stapley

What is Veracyte doing to seed the market for the TrueMRD MIBC launch, and how will its voice be heard amidst other developments in bladder cancer?

Marc explained that for MIBC, Veracyte will leverage its existing Decipher channel and customer relationships in urology. John emphasized the policy of only pursuing reimbursed tests and highlighted confidence in the test's performance and ongoing evidence generation. Marc stressed the differentiation of TrueMRD's whole-genome sequencing approach for future clinical studies.

“I mean, first and foremost, as you know, our initial test in TrueMRD, which is a platform, is going to be in muscle invasive bladder cancer. And for that, we really already have a lot of voice of the customer and that we are visiting those customers because of Decipher.”

asked by Kyle Mikson · answered by Marc Stapley