Q2 2026 Veracyte Inc Earnings Call Transcript
Key Points
- Launched Prosigna LDT and TrueMRD for MIBC, expanding portfolio into breast cancer and MRD markets.
- Delivered strong Q2 2026 results with 15% total revenue growth and 19% testing revenue growth.
- Achieved industry-leading profitability with adjusted EBITDA margin of 29.2%, above the 25% long-term target.
- Decipher Prostate grew 20% year-over-year, driven by strong volume and ASP gains, with record orders per physician.
- Affirma continued to gain market share with 10% volume growth and 18% revenue growth, supported by improved no-result rates.
- Raised full-year 2026 revenue guidance to $590-$596 million, reflecting confidence in growth.
- Prosigna has strong clinical evidence from the OPTIMA trial, including Level 1A data for premenopausal and node-positive patients.
- TrueMRD platform is extensible to multiple tumor types, offering long-term growth potential.
- Strong cash generation with $45.8 million from operations and $485.2 million in cash.
- Expanding sales force for Prosigna ahead of plan due to high demand and engagement from over 100 institutions.
- Reduced Decipher volume guidance by approximately 1% (1,000 tests) due to lower-than-expected growth in low-risk setting.
- Prosigna and TrueMRD revenue contributions are excluded from 2026 guidance due to lack of Medicare reimbursement for Prosigna and early launch stage.
- Prosigna launch faces headwinds from EMR integration and reimbursement uncertainties, with Medicare coverage still pending.
- Low-risk Decipher growth is only single-digit, impacted by NCCN guideline changes, limiting near-term expansion.
- Increased operating expenses by 16% year-over-year, driven by investments in launches and R&D, which may pressure margins.
- TrueMRD is in early commercialization stages with no revenue contribution expected this year, limiting near-term impact.
- Prosigna adoption may be slower due to the need for physician education and workflow integration, despite early enthusiasm.
- Affirma faces a harder comparison next year due to benefits from no-result rate improvements and PPCs in 2026.
- Guidance assumes no PPCs in the back half, which could lead to volatility if collections are lower than expected.
- Potential for increased competition in the breast cancer testing market, though not explicitly mentioned, remains a risk.
Good day and thank you for standing by. Welcome to the Veracyte second quarter 2026 financial results webcast. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker today, Kelly Gura, Director of Investor Relations. Please go ahead.
Good afternoon, everyone, and thank you for joining us today to review Veracyte's second quarter 2026 financial results. Joining me on the call are Marc Stapley, our Chief Executive Officer, and Rebecca Chambers, our Chief Financial Officer. Dr. John Leite, our Chief Commercial Officer, will also be available for Q&A.
Earlier this afternoon, we issued a press release detailing our second-quarter financial results, and we posted an accompanying presentation in the investors section of our website. Before we begin, I'd like to remind you that statements we make during this call will include forward-looking statements as defined under applicable securities laws.
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