Executive Summary

Q4 2024 delivered record revenue of $118.6M (+21% YoY), testing revenue of $112.2M (+24% YoY), and adjusted EBITDA of $26.1M (22.0% margin), marking the 10th consecutive quarter with ≥20% testing revenue growth .
Decipher continued to be the growth engine (revenue +44% YoY; volume +45% to >22,400 tests), while Afirma grew revenue +4% and volume +8% despite a tough prior-year collection comp .
2025 guidance: testing revenue $470–$480M (12–15% YoY; 14–16% ex-Envisia pause) and adjusted EBITDA margin ~21.6%; total company revenue guidance withheld pending clarity on Marseille, France operations .
Near-term stock narrative likely hinges on Marseille uncertainty (potential sale/bankruptcy of Veracyte SAS), Q1 seasonality (Afirma), and the step-down in product/biopharma lines, partially offset by durable core testing growth and margin discipline .

What Went Well and What Went Wrong

What Went Well

Decipher and Afirma execution: Decipher revenue +44% and volume +45% to >22,400 tests; Afirma revenue +4% and volume +8% to >16,300 tests, underscoring strong adoption and evidence tailwinds (NCCN Level I status) .
Profitability and cash generation: Adjusted EBITDA $26.1M (22.0% margin) and cash from operations $24.5M in Q4; FY adjusted EBITDA margin 20.6% and operating cash flow $75.1M .
Non-GAAP operating expenses flat YoY at $57.9M, reflecting continued financial discipline; testing ASP ~~$2,875 (~~$2,850 ex prior-period collections), up ~4% YoY .

Management quote: “We ended the year with exceptional performance, delivering record revenue in Q4 and achieving our 10th consecutive quarter of 20% or greater testing revenue growth.” – Marc Stapley, CEO .

What Went Wrong

Non-core lines pressured: Product revenue -18% YoY to $3.0M and biopharma/other -17% to $3.5M; product gross margin 7.3% amid supply/manufacturing challenges .
Testing gross margin down ~150bps due to lower prior-period collections vs 2023; non-GAAP corporate gross margin 69.3% (down ~130bps YoY) .
Marseille strategic review introduces operational and timing risk; company withheld total revenue guidance; expects up to $15M one-time costs in 2025 and ~$13M annualized profit improvement potential from 2026+ if actions proceed .

Financial Results

Summary P&L and Margins (quarterly)

Metric	Q2 2024	Q3 2024	Q4 2024
Total Revenue ($M)	$114.4	$115.9	$118.6
GAAP Diluted EPS ($)	$0.07	$0.19	$0.06
Non-GAAP Diluted EPS ($)	$0.30	$0.33	$0.36
GAAP Gross Margin (%)	68%	68%	66.4%
Non-GAAP Gross Margin (%)	71%	71%	69.3%
Adjusted EBITDA ($M)	$24.0	$27.3	$26.1
Adjusted EBITDA Margin (%)	21%	24%	22.0%

Segment Revenue Mix

Revenue ($M)	Q2 2024	Q3 2024	Q4 2024
Testing	$107.0	$109.5	$112.2
Product	$3.9	$3.2	$3.0
Biopharma & Other	$3.6	$3.1	$3.5
Total	$114.4	$115.9	$118.6

Volumes and KPIs

KPI	Q2 2024	Q3 2024	Q4 2024
Total Test Volume	39,023	39,032	41,271
Testing Volume	36,792	36,792	39,107
Decipher Volume (tests)	~19,900	~21,250	>22,400
Afirma Volume (tests)	~15,700	~15,100	>16,300
Testing ASP (Q4 only)	~$2,875; ~$2,850 ex prior-period collections	—	—

Note: Decipher and Afirma volumes are reported as “close to,” “approximately,” or “more than” in company materials .

Versus Estimates (S&P Global)

S&P Global consensus for Q4 2024 (EPS/Revenue/EBITDA) was unavailable due to a data access error; management commentary and analyst questions suggested testing growth expectations for 2025 were set above prior consensus qualitatively, but no numeric consensus is provided here .
Values from S&P Global were not retrieved due to API limits; consensus comparison is therefore unavailable.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Testing Revenue ($M)	FY 2025	N/A	$470–$480 (12–15% YoY; 14–16% ex-Envisia)	New
Adjusted EBITDA Margin (%)	FY 2025	N/A	~21.6% (vs 20.6% in FY 2024)	New
Total Company Revenue	FY 2025	N/A	Not provided due to Marseille variables	Withheld
GAAP & Non-GAAP Tax Rate	FY 2025	N/A	Mid-to-high single digits	New
Q1 Adj. EBITDA Margin	Q1 2025	N/A	Mid-teens (seasonality and resets)	New
One-time Costs (Marseille)	FY 2025	N/A	Up to $15M	New
Profit Improvement (Marseille)	FY 2026+	N/A	~+$13M annualized if actions proceed	New
Envisia Test	FY 2025	N/A	Paused end of 2024; ~-$6M revenue impact to growth calc	New

Additional context: Product and biopharma revenues each run at ~$2M per quarter; SAS fixed cost structure ~$7M per quarter; net operating losses ~$5M per quarter, with timing/impact dependent on sale or bankruptcy outcomes .

Earnings Call Themes & Trends

Topic	Q2 2024 (Prior-2)	Q3 2024 (Prior-1)	Q4 2024 (Current)	Trend
Decipher penetration & evidence	Record volume (~19.9K), NCCN highest-level rating; multiple new studies; strong share gains	Volume ~21.3K; raised FY guidance; ESMO/ASTRO evidence expansion; cash generation	Volume >22.4K; ~40% market penetration; ~65% share; NCCN Level I only gene-expression test; metastatic technical assessment approved; NY state approval	Strengthening adoption; evidence-driven tailwinds
Afirma coverage & growth	Medicare LCD adds Bethesda V; record volume (~15.7K)	Revenue +19% YoY; volume +12% to ~15.1K	Volume >16.3K (+8%); revenue +4%; Bethesda V/VI revenue +80% YoY; guide high-single-digit growth	Steady growth; moderate ASP tailwind in 2025
Marseille/IVD/Prosigna	IVD focus; restructuring in biopharma/portfolio	nCounter license impairment (prior); operations evolving	Considering no longer funding SAS; exploring sale; possible bankruptcy; intent to maintain Prosigna supply via buyer	Strategic pivot; timeline risks near term
MRD platform (C2i)	Workflow build; portfolio prioritization steps	Continued progress; adj. EBITDA strong	Lab workflow set; NY State approval submitted; MolDx Z-codes submitted; tech assessment planned; launch target 1H26	Executing toward 1H26 launch
Testing margins & ASP	Non-GAAP GM 71%; adj. EBITDA 21%	Non-GAAP GM 71%; adj. EBITDA 24%	Non-GAAP GM 69.3%; testing GM 72.3%; ASP ~~$2,875 (~~$2,850 ex collections)	Slight GM compression on collections mix
Macro/seasonality	Cash generation; strong core demand	Raised FY revenue guidance; cash to ~$274M	Q1 step-down (Afirma seasonality), weather-driven sample transit delays (3 days)	Typical Q1 cadence; transient logistics

Management Commentary

“Testing revenue… marked our 10th consecutive quarter of 20% or greater testing revenue growth, demonstrating the durability and runway of Afirma and Decipher.” – Marc Stapley, CEO .
“With the 2025 updated NCCN guidelines for prostate cancer, Decipher is still the only gene expression test with Simon Level 1 evidence… recommended… to make personalized treatment decisions for prostate cancer patients.” – Marc Stapley, CEO .
“Given the declines in biopharma and our manufacturing and supply challenges for Prosigna, we… are considering no longer funding [Veracyte SAS]… seeking buyer(s)… SAS may be required to commence bankruptcy proceedings this year.” – Marc Stapley, CEO .
“We are forecasting testing revenue of $470–$480M… adjusted EBITDA margin to improve by ~100bps… GAAP and non-GAAP tax rate mid-to-high single digits.” – Rebecca Chambers, CFO .

Q&A Highlights

Capital allocation vs margin discipline: Management emphasized portfolio rationalization (Marseille) to create investment capacity while sustaining best-in-class profitability and cash generation .
Decipher metastatic launch cadence: Contribution assumed small in H2 2025; focus remains on localized business; ramp requires commercialization and physician education .
Afirma growth drivers: High single-digit revenue growth guided, driven mostly by volume; limited ASP tailwind despite expanded LCD; Bethesda V/VI revenue +80% YoY in Q4 .
MRD strategy: Whole-genome, tumor-informed focus near term; platform supports future tumor-naive; targeting muscle invasive bladder cancer first with MolDx submissions and NY State approval efforts .
Marseille financial framing: Product/biopharma ~$2M each per quarter; SAS fixed costs ~$7M per quarter; 2025 one-time costs up to $15M; potential ~$13M annualized profit improvement from 2026+ .

Estimates Context

S&P Global consensus data for Q4 2024 was unavailable due to an API access limit; no numeric consensus comparisons can be provided. Management’s 2025 testing revenue guidance (14–16% ex-Envisia) was characterized by one analyst as “well ahead of consensus expectations,” reinforcing positive estimate momentum qualitatively .
Where estimates may adjust: Upward bias for Decipher volumes/penetration and sustained Afirma growth; margin profile guided +~100bps in 2025 supports EBITDA revisions; total revenue estimates may remain uncertain near term pending Marseille outcomes .

Key Takeaways for Investors

Core engine intact: Decipher and Afirma continue to drive double-digit testing revenue growth with robust evidence (NCCN Level I for Decipher), underpinning durable top-line expansion .
Profit discipline: Non-GAAP opex flat YoY; adj. EBITDA margin sustained at ~20–22%; 2025 guidance targets ~21.6% despite portfolio reshaping .
2025 setup: Testing revenue $470–$480M (12–15% YoY; 14–16% ex-Envisia); Q1 margin step-down is seasonal; metastatic contributes modestly H2 2025 with larger multi-year impact thereafter .
Watch Marseille: Absence of total revenue guidance and potential sale/bankruptcy of SAS are key overhangs; monitor one-time costs in 2025 and execution on maintaining Prosigna supply .
MRD catalyst path: Regulatory/reimbursement groundwork progressing (NY State, MolDx submissions); inaugural launch targeted 1H26—an emerging medium-term growth vector .
ASP/mix dynamics: Q4 testing margins impacted by lower prior-period collections vs 2023; expect normalization as collections cadence stabilizes .
Portfolio optionality: Rationalization could unlock capital for growth drivers (metastatic Decipher, MRD, IVD timelines reset), with medium-term profitability tailwinds if actions proceed .

VERACYTE, INC. (VCYT)·Q4 2024 Earnings Summary