Veracyte Inc. Reports Robust Q3 Earnings Performance

Veracyte Inc ((VCYT)) has held its Q3 earnings call. Read on for the main highlights of the call.

Veracyte Inc. recently held its earnings call, revealing a strong quarter marked by record revenue growth and profitability. The company showcased robust performance from its core testing business, particularly Decipher and Afirma, achieving a significant milestone by reaching its adjusted EBITDA margin target ahead of schedule. Despite these achievements, challenges remain, including declining biopharmaceutical revenue, competitive pressures from new technologies, and a slight decrease in testing ASP.

Record Revenue Growth

Veracyte reported a commendable total revenue growth of 14% year-over-year, reaching approximately $132 million in Q3 2025. The core testing business was a major contributor, with an 18% increase in revenue. Notably, Decipher and Afirma demonstrated significant volume growth, with 26% and 13% respectively, underscoring their pivotal role in the company’s financial success.

Strong Profitability

The company achieved a record adjusted EBITDA margin of 30%, a 650 basis point improvement from the previous year. This performance exceeded expectations, with Veracyte reaching its goal of a 25% adjusted EBITDA margin more than a year ahead of its internal plans, highlighting effective cost management and operational efficiency.

Decipher’s Clinical Utility and Growth

Decipher continued its impressive trajectory, delivering approximately 26,700 tests in Q3. This marks the 14th consecutive quarter of over 25% year-over-year volume growth. The test’s clinical utility is increasingly recognized by physicians, particularly in high-risk localized and metastatic patients, reinforcing its position as a critical tool in patient management.

Afirma’s Continued Success

Afirma achieved a 13% volume growth in Q3 2025, driven by new account wins and increased utilization per account. The operational efficiency program is progressing well, with a transition to a new transcriptome workflow expected to be completed by year-end, promising further enhancements in service delivery.

Positive Financial Outlook

Veracyte raised its 2025 total revenue guidance to $506 million to $510 million, reflecting confidence in its growth trajectory. The adjusted EBITDA margin guidance was also increased to exceed 25% for the year, indicating strong financial health and strategic foresight.

Biopharmaceutical Revenue Decline

Despite overall growth, biopharmaceutical and other revenue saw a decline, decreasing to $800,000 from $3.1 million in the prior year period. This drop was attributed to the restructuring and liquidation of Veracyte SAS, highlighting a challenge in this segment.

Challenging Competitive Landscape

The earnings call also addressed concerns about discordant results between Decipher and digital pathology AI scores, which could potentially confuse clinicians. While Decipher remains the gold standard, the emergence of new technologies necessitates careful evidence generation to maintain leadership in the field.

Testing ASP Decline

Testing ASP experienced a slight decline of 2% compared to the prior year. This was primarily due to the impact of higher prior period collections and the Afirma Laboratory Benefit Manager impact, presenting a minor challenge in the company’s pricing strategy.

Forward-Looking Guidance

Looking ahead, Veracyte’s guidance remains optimistic. The company reported a 14% year-over-year increase in total revenue and raised its full-year revenue guidance to $506-510 million. The adjusted EBITDA margin guidance was also increased to exceed 25% for 2025. Strategic growth initiatives were emphasized, including the sustained expansion of Decipher, the transition to the Afirma v2 transcriptome, and the upcoming launch of its MRD platform, TrueMRD, in muscle invasive bladder cancer.

In conclusion, Veracyte’s earnings call painted a picture of a company on a strong growth trajectory, with record revenue and profitability. While challenges such as declining biopharmaceutical revenue and competitive pressures exist, the company’s strategic initiatives and positive financial outlook suggest a promising future. Investors and stakeholders will be keenly watching how Veracyte navigates these challenges and capitalizes on its growth opportunities.