Executive Summary

Strong quarter: revenue $131.9M (+14% y/y), testing revenue $127.8M (+17% y/y), GAAP diluted EPS $0.24 and non-GAAP diluted EPS $0.51; adjusted EBITDA margin reached a record ~30% as management raised full‑year revenue and profitability guidance .
Beat vs S&P Global consensus: Revenue beat by ~$7.0M ($131.9M vs $124.9M*), and non‑GAAP EPS beat by ~$0.19 ($0.51 vs $0.32*). EBITDA (S&P definition) also modestly beat ($28.4M vs $26.4M*). Management cited lab efficiencies and timing of project spend as drivers, with Q4 investments planned * * [functions.GetEstimates].
Mix and pipeline strength: Decipher revenue +26% to $82.2M on ~26,700 tests; Afirma +7% to $43.2M on ~17,000 tests; total testing volume +19% to ~43,679. Company highlighted evidence momentum (e.g., STAMPEDE CHEMO benefit in Cell) and Afirma v2 transition; TrueMRD path to MIBC launch 1H26 remains on track .
Guidance raised: FY25 total revenue to $506–$510M (from $496–$504M), testing revenue to $484–$487M (from $477–$483M), and adjusted EBITDA margin to >25% (from 23.5%). Q4 expected ~25% adjusted EBITDA margin; sequential dynamics impacted by Q3 prior‑period collections and holiday timing .

What Went Well and What Went Wrong

What Went Well

Profitability inflection: Adjusted EBITDA $39.7M (30.1% margin), up 45% y/y; non‑GAAP diluted EPS $0.51 vs $0.33 y/y; management: “record 30%…far exceeding our expectations” and “best‑in‑class profitability profile” .
Decipher strength and evidence tailwinds: Decipher revenue +26% to $82.2M on ~26,700 tests; new STAMPEDE data in Cell show Decipher predicts chemo benefit in metastatic prostate cancer, reinforcing clinical utility and metastatic expansion launched in June .
Operating leverage and cash: Non‑GAAP gross margin 73% (up ~150 bps y/y), non‑GAAP opex up just 2% y/y to $58.6M; cash from operations $44.8M; cash, equivalents, and ST investments $366.4M at Q3 end .

Quotes:

CEO: “We delivered another outstanding quarter… enabling us to raise both our revenue and profitability guidance” .
CFO: “Adjusted EBITDA was $39.7 million… well above our expectations given the benefit of prior‑period collections, lab efficiencies, and timing of some project investments” .

What Went Wrong

SAS deconsolidation noise: GAAP other income (loss) impacted by $6.7M loss on deconsolidation; biopharma and other revenue fell to $0.8M vs $3.1M y/y due to SAS restructuring/liquidation .
Testing ASP modestly lower: Testing ASP $2,925, down ~2% y/y on prior‑period collection mix and lab benefit manager impact; adjusting for ~$2.5M PPC, ASP ~$2,875, flat y/y (call detail) .
Product margin outlook: Product GM rose y/y in Q3 (~52% non‑GAAP), but CFO cautioned it should decline in Q4 as they transition to contract manufacturing .

Financial Results

Core P&L vs prior periods and S&P consensus

Metric	Q3 2024	Q2 2025	Q3 2025 (Actual)	Q3 2025 (Consensus)
Revenue ($M)	$115.86	$130.16	$131.87	$124.85*
Testing Revenue ($M)	$109.54	$122.26	$127.76	—
GAAP Diluted EPS ($)	$0.19	$(0.01)	$0.24	—
Non‑GAAP Diluted EPS ($)	$0.33	$0.44	$0.51	$0.32*
Gross Margin (GAAP, %)	68.2%	69.0%	69.2%	—
Gross Margin (Non‑GAAP, %)	71.2%	71.5%	72.8%	—
Adjusted EBITDA ($M)	$27.33	$35.78	$39.73	$26.38 (EBITDA)*
Adjusted EBITDA Margin (%)	23.6%	27.5%	30.1%	—

Notes: Consensus values marked with an asterisk (*) are from S&P Global via the GetEstimates tool; “Primary EPS” reflects non‑GAAP/adjusted EPS definitions used by S&P. Values retrieved from S&P Global.

Segment and mix – Q3 2025

Segment / KPI	Q3 2025	YoY
Decipher Revenue ($M)	$82.2	+26%
Afirma Revenue ($M)	$43.2	+7%
Product Revenue ($M)	$3.3	+4%
Biopharma & Other ($M)	$0.8	down from $3.1
Total Testing Volume (tests)	~43,679	+19%
Total Volume (tests)	~45,888	+18%

KPIs – Q3 2025 details

KPI	Q3 2025	Context
Decipher Volume (tests)	~26,700	14th straight quarter >25% y/y growth (mgmt)
Afirma Volume (tests)	~17,000	Strong account wins, utilization up (mgmt)
Testing ASP ($/test)	~$2,925; ex‑PPC ~$2,875	Decline vs y/y due to prior‑period collections and LBMs
Non‑GAAP Opex ($M)	$58.6	+2% y/y; tight cost control
Operating Cash Flow ($M)	$44.8 (Q3)	$83.7 YTD (9M)
Cash, Equivalents & ST Inv. ($M)	$366.4 (9/30/25)	Balance sheet strength

Non‑GAAP metrics exclude amortization, acquisition‑related items, stock‑based comp, certain restructuring/legal items, and other adjustments per company policy .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Testing Revenue	FY 2025	$477M–$483M	$484M–$487M	Raised
Total Revenue	FY 2025	$496M–$504M	$506M–$510M	Raised
Adjusted EBITDA Margin	FY 2025	23.5%	>25%	Raised

Management also indicated Q4 adjusted EBITDA margin of ~25% and that Q4 revenue dynamics are affected by Q3 prior‑period collections, holiday timing, and absence of small French revenue contribution in Q4 .

Earnings Call Themes & Trends (Q1–Q3 2025)

Topic	Q1 2025 (Prior-2)	Q2 2025 (Prior-1)	Q3 2025 (Current)	Trend
Decipher trajectory	+37% y/y volume; NCCN tailwinds; metastatic limited release	~25,500 tests; metastatic full launch June; 65% share claim; continued evidence	~26,700 tests; strong high‑risk traction; clinical evidence momentum (ASTRO/STAMPEDE)	Positive, accelerating volumes and breadth
Afirma execution	+10% volume; v2 transcriptome planned; GRID momentum	+8% volume; v2 transition summer; productizing GRID insights	+13% volume; one‑third v2 transitioned; NYS approval; utilization per account up	Positive; cost & efficiency benefits building
MRD roadmap	WGS‑based approach; TOMBOLA lead‑time; UMBRELLA trial; MIBC 1H26 launch target	MolDX TA submitted; NEOGLAST/Neoblast trial planned; channel leverage via urology	“TrueMRD” brand; 10+ studies in flight; receive samples for NeoBLAST; MIBC launch with reimbursement 1H26	On track; growing study footprint
Digital Pathology / AI	70k slides scanned; RUO rollout to collaborators	90k slides scanned; grid + imaging complementarity; operationalize scanning	115k slides scanned; mgmt emphasizes Decipher as “gold standard” amid discordant DPAI results	Expanding data asset; cautious clinical stance
Supply chain / tariffs	v2 transcriptome helps mitigate tariff/surcharge risks	—	Product GM headwind ahead from contract manufacturing; overall testing GM aided by v2	Neutral to mildly negative in product; mitigated in testing
SAS / restructuring	Decision to cease funding; bankruptcy process updates	Sale of SAS manufacturing; deconsolidation Aug 1; non‑cash impairment	$6.7M loss on deconsolidation in Q3; vendor legal settlement offsets some items	Winding down, noise abating

Management Commentary

“Our adjusted EBITDA margin reached a record 30%... a significant accomplishment, which we attribute to our disciplined portfolio focus. It enables us to continue to invest in our robust pipeline” – CEO Marc Stapley .
“Testing gross margin of 74% exceeded our expectations, driven by improved lab efficiencies… We are raising testing revenue guidance… and adjusted EBITDA margin guidance for the year to exceed 25%” – CFO Rebecca Chambers .
On digital pathology vs Decipher: “In discordant results… physicians focus on the gold standard, which, frankly, is Decipher” – CEO Marc Stapley .
On 2026 outlook: “Our early look at 2026 revenue is above the Street… extremely excited about 2026 and beyond” – CFO Rebecca Chambers .

Q&A Highlights

Digital pathology and complementarity: Management emphasized Decipher’s robust evidence base and cautioned that discordant DPAI results can confuse clinicians; DP is being advanced via GRID and large‑scale slide scanning, with clinical use contingent on rigorous evidence .
Margin/investment balance: With margins ahead of plan, Veracyte will accelerate investment into breast (Prosigna channel), MRD, and clinical trials in Q4 and 2026 while managing toward ~25% adjusted EBITDA longer‑term .
Sequential dynamics and Q4: Q3 benefited from ~$2.5M prior‑period collections; Q4 guide contemplates no repeat of PPC, holiday timing headwinds, and minimal French revenue contribution .
MRD positioning: Expect to leverage Decipher urology/rad onc channel (reach ~70% of MIBC patients) and launch with reimbursement; whole‑genome approach differentiated for tracking clonal evolution and informing therapy .
2026 setup: Management noted an “above the Street” early revenue view (not formal guidance) despite a ~$10M biopharma revenue headwind next year .

Estimates Context

Q3 2025 vs S&P Global consensus:
- Revenue: $131.87M actual vs $124.85M estimate → beat by ~$7.0M *.
- Primary EPS (non‑GAAP): $0.51 actual vs $0.32 estimate → beat by ~$0.19 *.
- EBITDA (S&P definition): $28.38M actual vs $26.38M estimate → beat by ~$2.0M*.
  Values retrieved from S&P Global.
Forward look (S&P Global): Q4 2025 revenue consensus ~$131.73M*; Primary EPS ~$0.39*. Management expects ~25% adjusted EBITDA margin in Q4 with increased investment, and holiday/PPC effects impacting sequential comparisons . Values retrieved from S&P Global.

Key Takeaways for Investors

Quality beat with raised FY25 guide: Revenue, non‑GAAP EPS, and EBITDA all beat S&P consensus; FY25 revenue and margin guidance moved up, supported by mix, lab efficiencies, and disciplined opex *.
Decipher remains engine: +26% revenue on strong volume growth, expanding into metastatic setting with growing evidence (STAMPEDE) and GRID‑powered signatures (e.g., P10/PORTOS) to deepen clinical relevance .
Afirma improvement and COGS tailwinds: 13% volume growth; v2 transcriptome transition underway with New York approval, supporting testing gross margin durability into 2026 .
MRD optionality: TrueMRD pipeline across multiple tumors with first MIBC launch targeted 1H26 and expected reimbursement; leveraging Decipher channel for go‑to‑market .
Non‑GAAP discipline intact: Record 30% adjusted EBITDA margin this quarter; company still plans to manage toward ~25% while funding high‑ROI launches (breast, MRD) .
Watch Q4 cadence: Expect margin normalization (~25%) and sequential revenue dynamics given lack of Q3 PPC and holiday timing; no fundamental change to growth trajectory .
Stock reaction catalysts: Durable high‑teens testing growth, above‑Street early view into 2026, and evidence‑driven MRD/breast launch milestones are key narrative drivers into 2026 .

Appendix: Additional Q3‑Relevant Press Releases

Cell publication (STAMPEDE): Decipher Prostate predicts chemotherapy benefit in metastatic prostate cancer; supports metastatic launch and guideline ambitions .
NIGHTINGALE trial enrollment complete for Percepta Nasal Swab (2,400 patients) – largest clinical utility trial in nodules; a downstream entry for future launch/reimbursement path .

Non‑GAAP policy and reconciliations are detailed in the company’s materials; adjustments include amortization, acquisition‑related items, stock‑based comp, restructuring/legal items, FX and SAS deconsolidation‑related items (see reconciliations) .

Values marked with an asterisk (*) are from S&P Global (GetEstimates). Values retrieved from S&P Global.

VERACYTE, INC. (VCYT)·Q3 2025 Earnings Summary