Veracyte Sees Robust Q2 Growth with a 27% Revenue Increase
Veracyte, Inc., a global genomic diagnostics company, reported a strong second quarter in 2024, with a 27% increase in revenue to $114.4 million compared to the same period last year. The company's testing revenue saw a significant rise of 31%, primarily driven by the robust demand for its Decipher and Afirma tests.
Veracyte achieved a GAAP net income of $5.7 million and an adjusted EBITDA margin of 21%, raising its full-year revenue guidance to between $432 million and $438 million.
Key Takeaways
- Veracyte reported a 27% increase in Q2 2024 revenue, reaching $114.4 million.
- Testing revenue grew by 31%, driven by strong demand for Decipher and Afirma tests.
- GAAP net income was reported at $5.7 million, with an adjusted EBITDA margin of 21%.
- Full-year revenue guidance has been raised to $432 million to $438 million.
- The company highlighted strategic imperatives, including growth in key products, launching IVD products, and addressing new cancer challenges.
- Veracyte expects supply chain issues to impact ProSigna tests in H2.
- Cash from operations generated was $29.6 million.
Company Outlook
- Veracyte anticipates continued revenue growth and profitability through 2024.
- The company is investing in innovation and expects to end the year with $260 million to $270 million in cash.
- Veracyte is working on policy updates with commercial payers for LCD products and driving market penetration with Decipher.
- The MRD assay is expected to launch in 2026.
Bearish Highlights
- Biopharmaceutical and other revenue declined by 22% year-over-year to $3.6 million.
- Supply chain issues are anticipated to affect the ProSigna tests in the second half of the year.
Bullish Highlights
- Total testing volume increased by 23% to approximately 39,000 tests.
- The company is making progress in the NIGHTINGALE trial for Nasal Swab and submitted its Prosigna nCounter test for approval under the IVDR framework.
Misses
- Despite the overall positive performance, the company did experience a decrease in biopharmaceutical and other revenue.
Q&A Highlights
- Veracyte discussed securing coverage for metastatic LCD, capital allocation, IP litigation, and growth drivers for Decipher.
- The acquisition of C2i Genomics has led to blended expenses but does not significantly change the trajectory of R&D spend or adjusted EBITDA.
Veracyte's second quarter demonstrated strong performance with significant revenue growth attributed to its Decipher and Afirma tests. The company's strategic initiatives, such as expanding product offerings and serving more of the patient journey, are set to drive future growth. While facing some challenges, such as supply chain issues affecting ProSigna tests, Veracyte remains confident in its outlook, supported by a robust pipeline and focus on innovation. The company's commitment to solving new cancer challenges and its portfolio approach in R&D are key factors distinguishing it within the diagnostics industry. Veracyte's financial health, marked by solid cash generation and raised revenue guidance, positions it well for the remainder of 2024.
