Q2 2026 Veracyte Inc Earnings Call

July 30, 2026

Speaker #1: Good day, and thank you for standing by. Welcome to the VERACYTE, second quarter, 2026, financial results webcast. At this time, all participants are in a listen-only mode.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press *11 on your telephone.

Speaker #1: You will then hear an automated message advising your hand is raised. To withdraw your question, please press *11 again. Please be advised that today's conference is being recorded.

Speaker #1: I would now like to hand the conference over to your speaker today, Kelly Gura, Director of Investor Relations. Please go ahead.

Speaker #2: 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.

Speaker #2: Dr. John Light, 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 Investor section of our website.

Speaker #2: 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.

Speaker #2: Forward-looking statements are subject to risks and uncertainties, and the company can give no assurance that they will prove to be correct. The company undertakes no obligation to update any forward-looking statements, except as required by law.

Speaker #2: To better understand the risks and uncertainties that could cause actual results to differ, we refer you to the documents that VERACYTE files with the Securities and Exchange Commission, including the most recent Forms 10-Q and 10-K.

Speaker #2: In addition, this call will include certain non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP financial measures are included in today's earnings release, accessible from the Investor section of Veracyte's website.

Speaker #2: I will now turn the call over to Marc Stapley, VERACYTE's CEO.

Speaker #3: Thank you, Kelly, and thank you all for joining us today. Q2 was a milestone quarter for Veracyte as we launched ProSigna LDT and TrueMRD, catalyzing two of our key growth opportunities and meaningfully expanding our portfolio.

Speaker #3: We advanced the clinical evidence supporting ProSigna, Decipher, and Afirma, while delivering another quarter of double-digit growth and industry-leading profitability. These achievements reflect years of investment in our platform, the growing body of evidence supporting our tests, and our differentiated commercial capabilities.

Speaker #3: More importantly, they enhance our ability to reach and positively impact more patients. Today, our portfolio helps guide patient care across multiple cancer types, and increasingly across the cancer care continuum—from risk assessment through recurrence monitoring.

Speaker #3: As we continue to expand that impact, we are approaching one of the most meaningful milestones in our company's history, serving our 1 millionth patient.

Speaker #3: The recent launches of ProSigna LDT and TrueMRD for muscle-invasive bladder cancer, or MIBC, represent the culmination of years of hard work. To say I am proud of these accomplishments and of our team for delivering them would be an understatement.

Speaker #3: I want to thank our employees and external collaborators whose expertise and partnership made these outcomes possible. I'm also grateful to the physicians who have worked with us to advance cancer care, and to the many thousands of patients whose participation in research helped make these innovations possible.

Speaker #3: Since launching the ProSigna test in the US following the presentation of the practice-changing OPTIMA trial results at ASCO, we've seen tremendous enthusiasm from both physicians and patients.

Speaker #3: ProSigna helps guide treatment decisions at a pivotal point in the breast cancer care journey, by quantifying the risk of recurrence up to 10 years and providing a likelihood benefit.

Speaker #3: Backed by the most rigorous clinical trial demonstration to date, ProSigna achieves this by providing intrinsic subtyping classification information from the well-validated, well-published PAM-50 signature that highlights the underlying biology driving the patient's cancer.

Speaker #3: This helps identify patients who can benefit from chemotherapy, and those who may be able to safely avoid it. ProSigna is foundational to our breast cancer franchise and represents one of the most significant product launches in Veracyte's history.

Speaker #3: As a reminder, OPTIMA is an independent, prospective, phase-three, randomized trial that enrolled more than 4,400 high-risk early-stage breast cancer patients. The study met its primary endpoint and demonstrated that more than two-thirds of clinically high-risk patients may safely avoid chemotherapy without compromising outcomes.

Speaker #3: Importantly, this includes premenopausal women and patients with up to nine positive lymph nodes. The OPTIMA results also generated significant media attention, making OPTIMA and ProSigna the most covered diagnostic story at ASCO.

Speaker #3: Looking ahead, publication in a leading peer-reviewed journal will represent another important milestone, further validating this Level 1A prospective evidence supporting ProSigna and its potential inclusion in future clinical guidelines.

Speaker #3: We see a significant opportunity to expand access to ProSigna in the US, where approximately 225,000 patients are diagnosed with ER-positive HER2-negative breast cancer each year.

Speaker #3: We believe many of these patients may benefit from the clinically validated insights ProSigna provides to help inform treatment decisions. With OPTIMA, ProSigna has the only clinically validated evidence for premenopausal women and patients with higher nodal involvement.

Speaker #3: This expands and strengthens the clinical utility already demonstrated in many prior studies, including as a prognostic test for node-negative patients. There are 157 publications to date featuring ProSigna, and more than 1,200 publications featuring the PAM50 classifier on which the test was built.

Speaker #3: In the near term, we are focused on educating key opinion leaders and driving adoption in high-volume centers. While menopausal status and nodal involvement may present a catalyst for the initial conversation, we believe healthcare providers will choose a test they can use with confidence across all ER-positive, HER2-negative patients, rather than stratifying their use based on these differentiating factors alone.

Speaker #3: We have been thrilled by the quality and breadth of engagement since launch. Which gives us confidence our commercial strategy is on point. We are now actively engaged with more than 100 institutions that help shape standards of care in breast cancer, including nationally recognized academic cancer centers, large integrated health systems, and regional oncology networks.

Speaker #3: Many of these organizations are evaluating broad adoption of ProSigna across their breast cancer programs, and in some cases have expressed interest in using ProSigna for all hormone receptor-positive patients that they treat.

Speaker #3: Based on this strong engagement, the growing activity on our ordering platform and our customers' desire to start incorporating ProSigna into existing practice management workflows we are expanding our sales force ahead of our original plan to capture the demand we are seeing.

Speaker #3: We are making progress on reimbursement and continue to have constructive discussions with multi-ex regarding Medicare coverage. We are encouraged by the engagement to date and look forward to providing updates as those discussions progress.

Speaker #3: I couldn't be more excited about the momentum we have seen since launch. While early, the response from patients, clinicians, key opinion leaders, and the broader oncology community reinforces our conviction that ProSigna can become a meaningful growth driver for VERACYTE and, even more importantly, improve quality of life for the hundreds of thousands of patients dealing with breast cancer.

Speaker #3: Turning now to MRD, we launched our first test on our two MRD platform in June, after securing Medicare reimbursement for recurrence monitoring in patients with MIBC following radical cystectomy.

Speaker #3: The two MRD monitoring tests for MIBC represent the first commercial application of our MRD platform and are entry into this rapidly growing market. Importantly, our whole genome approach to MRD is extensible, well beyond bladder cancer.

Speaker #3: With the potential to support multiple tumor types and clinical applications over time. Through MRD for MIBC, it is the first and only commercially available MRD test to utilize whole genome sequencing, not just for the landmark test, but also through longitudinal monitoring with all subsequent liquid biopsy surveillance tests.

Speaker #3: We believe this is a meaningful differentiator, offering a broader view of tumor biology and the ability to track tumor evolution over time—capabilities we expect will become increasingly important as oncology research and testing advances.

Speaker #3: More broadly, we believe VERACYTE is uniquely positioned to serve patients across the bladder cancer continuum. Today, Decipher Bladder helps physicians, risk stratified patients, and with two MRD for MIBC, we are adding recurrence monitoring at another critical point in the patient journey.

Speaker #3: Over time, we expect continued evidence generation, product enhancements, and portfolio expansion to further strengthen our position in bladder cancer management. We are leveraging the strong brand we have built through Decipher and our longstanding relationships across urology and radiation oncology to accelerate awareness and adoption of our first two MRD tests.

Speaker #3: In parallel, we are investing in the operational infrastructure of workflow enhancements and automation needed to support larger testing volumes as we intentionally expand the platform over time.

Speaker #3: While we remain in the early stages of commercialization of two MRDs for MIBC, we have been encouraged by the initial feedback from physicians who recognize the advantages of a truly whole-genome approach and the complementarity to our overall bladder program.

Speaker #3: We continue to believe that the two MRD platforms have the potential to become important long-term growth drivers for Veracyte. Moving on to Decipher Prostate.

Speaker #3: We delivered another strong quarter of revenue growth, up 20% year over year, driven primarily by 17% volume growth, with improved ASD contributing the balance.

Speaker #3: ASD growth reflects the significant, focused work our market access and billing teams completed over the last year, including operational improvements, strong payer engagement, and expanded coverage across multiple accounts, which led to higher recoveries per test.

Speaker #3: With just under 30,000 test resulted in the second quarter, we continue to see strong underlying demand for Decipher. Having said that, we are taking our expectations for volume for the year down by approximately 1%, or slightly more than 1,000 tests, primarily in the low-risk setting.

Speaker #3: Importantly, our expectations for the rest of the business remain on track. Low-risk disease represents an important growth opportunity for Decipher, and one where we are also actively investing to generate additional high-quality evidence.

Speaker #3: The 2025 NCCN guideline update reinforced the need for additional high-quality evidence supporting the use of genomic testing in low-risk patients considering active surveillance. We have a growing clinical data pipeline that we believe will address this unmet need, with several prospective and retrospective studies underway evaluating Decipher in active surveillance and low-risk patient populations.

Speaker #3: With initial readouts as early as 2027, as these data emerge, we believe they have the potential to further expand the clinical foundation for Decipher, supporting broader low-risk adoption and guideline inclusion over time.

Speaker #3: Turning to the balance of the Decipher business, which grew approximately 20% in Q2 ’26, off of a challenging prior year comp. Recall that Q2 ’25 benefited from the initial step-up in testing following the 2024 NCCN guideline updates made late in the year, which reflected Decipher’s position as the only gene expression test supported by high-quality evidence.

Speaker #3: That step-up has proved durable, and the underlying order trends this quarter give us confidence that the Decipher business is on a consistent trajectory of growth.

Speaker #3: For example, in Q2, we delivered our highest sequential volume growth since that exceptional quarter last year. This growth was driven by both the strong increase in new ordering physicians and deeper penetration within our existing base.

Speaker #3: Orders per physician reached a new record, reflecting broader Decipher use by our core physician base across more of their patients. Together, these trends show that physicians are increasingly relying on Decipher to provide critical information that helps guide treatment decisions for patients with prostate cancer across risk groups.

Speaker #3: We were particularly encouraged by strong ordering trends in intermediate- and high-risk localized disease, as well as post-prostatectomy and biochemical recurrence. These remain some of the largest and most attractive growth opportunities for Decipher, reflecting areas where the clinical evidence base is strongest, guideline support is uniquely established, and physician adoption continues to deepen.

Speaker #3: More broadly, evidence generation remains robust across these settings, as well as the metastatic setting, a critical component to ensuring continued adoption and long-term growth.

Speaker #3: During the quarter, Decipher Prostate was featured in more than 35 publications and abstracts, including level 1b evidence from the ENACT trial presented at ASCO.

Speaker #3: This study provided new predictive evidence supporting Decipher Prostate to help inform the use of triplet therapy in metastatic prostate cancer, identifying patients most likely to benefit from the addition of chemotherapy to standard doublet hormone therapy.

Speaker #3: Looking ahead, we are excited about the steady drumbeat of upcoming conference presentations in the second half of the year. At ASTRO in September, Decipher is expected to be featured in six oral presentations, including three focused on treatment intensification with androgen deprivation therapy, or ADT, a key area of clinical decision-making in intermediate-risk and post-RP biochemical recurrent prostate cancer.

Speaker #3: We are particularly excited about upcoming analyses from NRGRTOG0815, which we believe have the potential to further establish Decipher's role in personalizing treatment with radiation and ADT for intermediate risk prostate cancer patients our largest indication.

Speaker #3: We are also looking forward to results from the SPORT trial, evaluating whether PAM50-based subtyping can provide additional clinically useful information in prostate cancer. Together with additional data expected at ESMO later this year supporting Decipher's utility in high-risk disease, these presentations represent additional data expanding the clinical utility of our tests across the prostate cancer continuum.

Speaker #3: Beyond prostate cancer, we saw encouraging Q2 order trends for Decipher bladder, which helps physicians risk stratify patients with muscle invasive as well as non-muscle invasive disease, and guide treatment decisions.

Speaker #3: The test was featured in 13 publications and abstracts in Q2, including six abstracts at AUA, with more expected later this year at ESMO, highlighting our growing body of evidence across the bladder cancer continuum.

Speaker #3: Looking ahead, we remain highly confident in Decipher's long-term growth opportunity, supported by expansion of our customer base, durable and broader physician adoption, and expanding body of clinical and real-world evidence, including multiple important study readouts expected over the next few years, and continued innovation across our platform.

Speaker #3: Turning now to Afirma, we delivered another strong quarter with approximately 18,600 tests, representing 10% year-over-year volume growth and 18% revenue growth. We were pleased to see another quarter of increased utilization among existing physicians, continued expansion of our ordering physician base, and ongoing market share gains, reinforcing Afirma's position as the market leader in thyroid nodule molecular diagnostics.

Speaker #3: Revenue growth benefited from both sustained AST gains and favorable reimbursement wins from commercial payers. We also continue to realize the benefits of our V2 transcriptome workflow, which has improved our no-result rate significantly.

Speaker #3: Resulting in more patients receiving a test result and contributing to approximately 400 basis points of volume growth in the quarter. Evidence generation remains a key component of the Affirma growth strategy, as it does for all of our tests.

Speaker #3: Affirma was featured in 10 conference abstracts during the quarter, across leading medical meetings, including the American Association of Endocrine Surgeons, the American Association of Clinical Endocrinology, and the Endocrine Society.

Speaker #3: Multiple peer-reviewed manuscripts were published during the quarter, and growing interest from independent investigators evaluating Affirma's clinical utility in real-world practice continues to be a competitive differentiation.

Speaker #3: We are encouraged by the growing momentum behind Affirma Grid, which is supporting and expanding pipeline of academic and industry collaborations. These grid collaborations fuel a virtuous cycle of expanding evidence, leading to new publications, scientific presentations, and molecular insights, that will continue to strengthen the evidence base around Affirma.

Speaker #3: We expect to see more Affirma publications and scientific abstracts this year than in 2025, further accelerating that momentum. Overall, we remain very pleased with Affirma's performance and believe the combination of continued adoption, share gains, operational improvements, and expanding clinical evidence positions the franchise for continued growth.

Speaker #3: In closing, seeing years of investment and innovation translate into meaningful new opportunities for growth is incredibly rewarding, and a testament to the strength of our strategy, our execution, and most importantly, our people.

Speaker #3: Our mission remains centered on improving patient outcomes, and today our portfolio has helped the clinicians and patients make more informed treatment decisions across multiple cancer types and increasingly across the cancer care continuum.

Speaker #3: Supported by the continued strength of our core franchises, a robust pipeline of clinical evidence, and multiple opportunities for future innovation, we remain confident in our ability to continue to deliver durable, double-digit growth for the foreseeable future.

Speaker #3: With that, I'll turn the call over to Rebecca.

Speaker #1: Thanks, Marc. We deliver total revenue of $150.3 million in the second quarter, representing 15% year-over-year growth. Total volume increased to approximately $51,000 tests, up 13% compared to the same period in 2025.

Speaker #1: And we generated 45.8 million of cash from operations, ending the quarter with $485.2 million in cash, cash equivalents, and short-term investments. Testing revenue for the quarter was $145.7 million, an increase of 19% year-over-year driven by Decipher and Affirma growth of 20% and 18%, respectively.

Speaker #1: Total testing volume was $48,389 tests, representing 14% year-over-year growth. Testing ASP was $3,010, up 4% to the prior year and inclusive of approximately $4.5 million of prior period collections or PPCs.

Speaker #1: Excluding PPCs, normalized ASP increased 3% to approximately $2,900, driven by the benefits of operational efforts put into place over the course of 2025, which have led to sustained pricing gains in the first half of this year.

Speaker #1: Turning to gross margin and operating expenses, I'll focus on our non-GAAP results. Non-GAAP gross margin was 74.9%, up 340 basis points year-over-year, driven by strength in our testing business.

Speaker #1: Testing gross margin increased 200 basis points to 76%, reflecting operational efficiencies from our V2 transcriptome workflow, higher ASP, and PPCs. Non-GAAP operating expenses increased 16% year-over-year to $70 million.

Speaker #1: As we shared last quarter, certain IT expenses associated with software development and project management resources previously reported in G&A have been moved directly into R&D, as they are fully dedicated to our product development objectives.

Speaker #1: As a result, R&D expense increased $12.1 million year-over-year to $26.3 million, approximately half of which was driven by our organizational changes and the other half driven by increased clinical and product investment.

Speaker #1: Sales and marketing expense increased $2.4 million to $25.5 million, reflecting hiring to support our existing portfolio as well as the recent launches of Prosigna LDT and TruMRD.

Speaker #1: G&A expense decreased 4.8 million to $18.1 million, primarily due to the organizational changes previously mentioned. From a profitability standpoint, we delivered GAAP net income of 25.5 million in the quarter.

Speaker #1: Adjusted EBITDA was $44 million, or $29.2% of revenue, up 23% year-over-year and above our long-term target of 25%. This level of profitability continues to demonstrate our operating leverage as we both invest in our growth drivers and generate meaningful cash.

Speaker #1: Turning to our 2026 outlook, we are raising full-year total revenue guidance to $590 million to $596 million, representing 14% to 15% year-over-year growth compared to our prior range of $582 million to $592 million.

Speaker #1: This reflects expected testing revenue of $576 million to $582 million, representing 17 to 18 percent year-over-year growth. Compared to our prior range of $570 million to $580 million, with testing volume growth modestly below revenue.

Speaker #1: Included in our guidance is approximately $10 million of other testing revenue from cytology services and Decipher Bladder. Further, our guidance assumes approximately 20% Decipher revenue growth.

Speaker #1: Based on current ordering trends and normal seasonality, we expect approximately 31,000 tests in Q3 and 33,000 in Q4. And given PPCs collected year-to-date, and stronger-than-expected ASP performance this year, we now expect ASP to be slightly higher this year compared to 2025.

Speaker #1: For Affirma, we have increased our revenue guidance to approximately 12 to 14 percent year-over-year growth, driven by favorable year-to-date PPCs, ongoing ASP improvement, and an anticipated no-result rate of benefit of approximately 3% for the year.

Speaker #1: Due to typical seasonality and in line with prior years, we expect Q3 volume to be slightly down sequentially, with a larger step-up in Q4.

Speaker #1: On revenue, Afirma is expected to step down sequentially, given close to $3 million of PPCs in the second quarter. As Marc shared, we are pleased with the early feedback on our recently launched tests.

Speaker #1: Given that we do not yet have Medicare reimbursement for ProSigna and are still early in the launch process, our revenue guidance excludes contributions from these tests.

Speaker #1: Moving to profitability, we are maintaining our full-year adjusted EBITDA guidance of greater than 26%, reflecting our expected investment to support our growth initiatives throughout the year.

Speaker #1: As always, while we plan expenses on an annual basis, adjusted EBITDA may fluctuate quarter to quarter. In closing, Q2 was a milestone quarter for Veracyte.

Speaker #1: We successfully launched two important new products that expand our ability to serve patients across the cancer care continuum, while also delivering strong double-digit revenue growth, profitability, and cash generation.

Speaker #1: Combined with the strength of our core business, these achievements reinforce our confidence in our long-term growth opportunity and position us well to continue to deliver durable double-digit growth.

Speaker #1: We will now move into the Q&A portion of the call. Operator, please open the line.

Speaker #2: As a reminder, to ask a question, please press star 11 on your telephone. And wait for your name to be announced. To withdraw your question, please press star 11 again.

Speaker #2: In the interest of time, we ask that you please limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster.

Speaker #2: Our first question comes from Tycho Peterson with Jefferies. Your line is open.

Speaker #3: Hey, team. This is Lauren. I'm from Tycho. Thanks so much for taking the question. My first one would be on Decipher. With the lowered guidance—about 1,000 tests—is this, are you seeing a threat specifically from AI-based testing?

Speaker #3: And kind of off that topic, if these approaches continue to improve, what do you see as the future workflow? Would it be an AI-first triage model followed by a molecular confirmation, or are there certain indications where molecular profiling will remain the gold standard?

Speaker #3: Thanks.

Speaker #4: Hi, Lauren. Thanks for the question. No, we're not actually. The reduction in our internal expectations for Decipher for the year is only in the low category where we took it down by about 1,000 tests.

Speaker #4: Some of which most of which is actually behind us in the second quarter. And the real we think the rationale for that and what we're seeing there is the guideline change that happened at the end of last year where effectively for every test, whether molecular or AI-based, for active surveillance, it was taken out of guidelines.

Speaker #4: And so it's going to depend on, for that to come back and grow in double digits—it's still growing in single digits for us—but for it to come back and grow in double digits, it's going to need the evidence that we talked about.

Speaker #4: So we had slightly higher expectations for that coming into the year than we currently do in low-risk only. And so that affects every test on the market in similar ways.

Speaker #4: Now, not everybody has the same comp. In fact, low was very good for us in this quarter last year. And I'm sure for others, they have different starting points.

Speaker #4: But from a share standpoint, we're not really seeing any difference at all. And then so I think to the second part of your question, I mean, it doesn't really feature when that's not the fact here.

Speaker #4: We still think that molecular and AI are complementary. We already know they measure different parts of the biology and different things. And we've got a publication that we're working on that covers that, which we've talked about previously.

Speaker #4: And so I think the two could potentially coexist at some point, but I don't think it's necessarily one or the other model. In fact, physicians consistently tell us more information is better than less.

Speaker #4: Anything to add? No.

Speaker #5: I'll just add one quick thing, if you don't mind. And that really is to highlight the strength that we saw in the intermediate and high-risk category, as well as the durability of that strength, given incremental data that we hope will be released here shortly, as Marc mentioned on the call.

Speaker #5: And so yes, we have taken down the low-category by a day or two across the portion of the year, but I think we are seeing great strength and performance as expected in intermediate and high.

Speaker #5: And those are the areas where we have the most evidence, we have the most guidelines, and that will change here for Lowe as well over the course of 2027, 2028, 2029.

Speaker #5: So I think it's just, to me, the way I think about it is, we have a great growth driver today, and Lowe is an opportunity for incremental growth in the subsequent years.

Speaker #5: And as a very untapped market at this point in time.

Speaker #4: And Lauren, maybe if I can sorry, just to add to what Rebecca said. While we expect these low publication or studies to read out in 2027, 2028, we don't know if they're going to read out positively or not.

Speaker #4: But the good news is we have multiple shots on goal. With multiple studies coming our way.

Speaker #5: That have been enrolling now for six or seven years, so—exciting times.

Speaker #3: That's super helpful. Thank you. And then just one last question on the expansion of the market for ProSigna. What percent of the existing Oncotype market do you think is contestable over the next three to five years?

Speaker #3: And off of that, what do you expect the earliest uptake in, whether it's across the node-positive populations or just kind of color there? Thanks.

Speaker #6: This is John. Thanks for the question. Yeah, we're not limiting ourselves to any specific subsegment of the breast market. We believe the entirety of the HER2-negative, ER-positive population is addressable by our value proposition.

Speaker #6: The latest data from Optima happens to add predictive claims to the node-positive population, both postmenopausal and premenopausal, but one of the large value propositions here is where we start with an accurate risk stratification to understand what is the real risk of progression in the 10-year time frame.

Speaker #6: And for that, we already have level 1A evidence across the board. So like I said, we're excited by the Optima. Our results, but we're not limiting ourselves to just that node-positive population.

Speaker #5: And maybe one last thing to add. We haven't gone out and quantified what portion of the market we think we can take over the next three to five years, but I would say, as Marc cited in the script, based on some early feedback, we are very confident in our ability to have sustained growth with ProSigna and have had numerous conversations with centers that are large in nature who are contemplating not just dabbling and having more active procedures, not procedures, I'm sorry, more active engagement to the point of effectively fully switching.

Speaker #5: So we are optimistic and are optimism is fueled by engagement with the market post the Optima results.

Speaker #3: Thanks so much, guys. And congrats again on the corner.

Speaker #5: Thanks, Lauren.

Speaker #1: Thank you. Our next question comes from Sabu Nambi with Guggenheim. Your line is open.

Speaker #7: Hi, this is Ricky on for Sabu. Thanks for taking our question. So for a little more color maybe on just how you're thinking about ProSigna going forward from more of a commercial lens, in our early KOL checks oncologists have been really optimistic about adopting ProSigna and really excited about it.

Speaker #7: But EMR integration and ordering and results through the EMR were really the one headwind that's been mentioned in terms of increasing adoption. Could you speak to your plans for that type of integration or any other commercial or logistic initiatives you're focused on to support more ProSigna adoption?

Speaker #7: Thank you.

Speaker #6: Yeah, thanks for the question. We can't disagree. We believe that at volume, EHR integration goes a long way. Not just to simplify the logistical burden on the practice administrators and the physicians, but also in just streamlining and even potentially automating some of the test ordering and automation into the overall workflow.

Speaker #6: Having said all that, we are heavily investing in our team here that's able to leverage both internal resources and external partners and external service providers to get us integrated with as many practices as possible.

Speaker #6: The good news here is that was already an activity that was on its way to support our Decipher and our Affirma business, and that we can tag team on those efforts.

Speaker #6: But yeah, absolutely can't agree anymore.

Speaker #1: Thank you. Our next question comes from Keith Hinton with Freedom Capital Markets. Your line is open.

Speaker #2: Great. Thanks. Just one quick one on Decipher, and then a question on guidance. On Decipher, can you just talk a little bit about the low-risk population?

Speaker #2: What is the penetration level today for molecular diagnostics? And with the guideline changes that you're hoping to have reversed in the future with additional data, where do you think that penetration rate could go over the next few years?

Speaker #4: Yeah, happy to. I can talk about our penetration. We think we're about 20% penetrated into this important low-risk market, and in fact, the penetration is growing every quarter—even in this quarter.

Speaker #4: We saw a growth in the number of new customers and the growth in the number of ordering customers. And so it's continued to grow at a rate that we said single digit that exceeds the rate of incidence growth.

Speaker #4: But for it to really kick into a new gear, it will we do think it will need that NCCN guideline. So between now and then, I think it's going to continue to penetrate more, as it grows every quarter, hopefully every quarter, and certainly every year.

Speaker #4: And then I think guidelines put it in the same category as intermediate and now what we're seeing with high risk.

Speaker #5: And that is, to be clear, our expectation is that we believe that we can have at least 80% penetration in a similar amount of share, if not more, on a sustainable basis, on a optimized penetration.

Speaker #5: So there's a huge runway, not only in the low-risk opportunity, but equally in the high and to a lesser extent intermediate, though there's still immense amount of white space left in intermediate.

Speaker #5: You want to move on to the Decipher question, Keith? I'm sorry, the guidance question.

Speaker #4: Seeing those, Keith.

Speaker #1: Thank you. Our next question comes from Jacob Dodd with Morgan Stanley. Your line is now open.

Speaker #7: Yeah.

Speaker #8: Hi, good evening. Thanks, Simon, for Callum tonight. Correct me if I'm wrong. But I believe ProSigna launched with commercial coverage, but not with Multi-X.

Speaker #8: Could you help us understand how you're managing patient access for Medicare beneficiaries right now? Are you performing those tests at risk? And then what is your current expectation for the Multi-X timeline and confidence level based on Optima data?

Speaker #8: Thank you.

Speaker #6: Yeah. So ProSigna has already enjoyed coverage from Medicare via our on-market FDA-approved product. Our plan had been to transition away from the FDA-distributed product towards a centralized LDT, so from a coverage perspective, we're covered.

Speaker #6: The process moving forward is to submit a tech assessment that outlines our lab validation, the analytical validation, our bridging study through the FDA-approved product and platform, and to have that reviewed and subsequently approved by Medicare.

Speaker #6: We've already been enjoying a few exchanges with Multi-X. We see the path forward as a fairly straightforward and kind of see the approval of that tech assessment eminently.

Speaker #6: The last step would then be an agreement of pricing and for that, we have multiple paths to secure price. And we've guided before to expect the low end of that pricing around $2,500.

Speaker #8: Great. Thanks.

Speaker #1: Thank you. Our next question comes from Keith Hinton with Freedom Capital Markets. Your line is open.

Speaker #2: Great. Thanks for taking the follow-up. Just quickly on guidance, obviously, the results in the first two quarters of the year have been meaningfully above that 26% floor that you guys have given, which you maintained.

Speaker #2: So I just want to ask sort of how much of that is the incremental investment you talked about, kind of pulling forward some of the Salesforce build for ProSigna and how much of it is just conservatism or however you kind of want to think about it.

Speaker #2: And if you want to—just if you can give any color to the level of investment that you're pulling forward for ProSigna as well.

Speaker #5: Yeah. So I'll handle that last part first. So we are going from a roughly 10-person Salesforce exiting this year to a 15-person Salesforce exiting this year.

Speaker #5: So that's not going to be material in that meaningful of a contribution. As John spoke about, obviously EMRs are part of our activity plan here, and that is something that we are investing in and will invest as much as we can, because that is such a high-ROI endeavor.

Speaker #5: That being all that being said, I wouldn't call this conservatism, Keith. I would call it two things. One, we have a huge opportunity in front of us with a deep, deep pipeline across multiple indications across multiple portions of the care continuum that we want to invest in to drive higher revenue growth in the future, even above and beyond the relatively attractive levels we are today.

Speaker #5: So I think we have great opportunity in front of us across MRD, Decipher, Affirma, the rest of the urology space, and obviously, ProSigna. And so we're investing heavily in there.

Speaker #5: I would say the other thing on our guide is we don't necessarily guide on a go forward basis with PPCs and PPCs have been a significant contributor to the outperformance year to date.

Speaker #5: And so that is just something to take into account. We don't guide that in revenue, and we don't guide it in profitability. And then I would the last thing I would say on gross margin, we've had an amazing gross margin performance as we do see significant ProSigna volume in the back half the year, given our revenue recognition policies.

Speaker #5: As well as just the lack of reimbursement from the get-go, that is going to be a slight headwind, and that would be something to take into account. If you want to call that ProSigna investment, feel free.

Speaker #5: But those are really the contributing factors.

Speaker #2: Great. Thank you very much.

Speaker #1: Thank you. Our next question comes from Puneet Suda with Learning Partners. Your line is open.

Speaker #4: Yeah. Hi, guys. Thanks for the questions here. So just on Decipher, just wondering Decipher low risk, do you believe there was any impact from the ACA disenrollment on the volumes?

Speaker #4: Or was this all largely comp issues that you saw in the quarter? And how should we think about overall growth for Decipher? You pointed out a number of drivers that helped in 2024, NCCN and it's been a very strong product.

Speaker #4: But how should we think about sort of the stable growth trajectory? What is that number for Decipher? And I'm wondering if you can provide anything for 2027 color if you would like to.

Speaker #4: Thank you.

Speaker #2: Yeah, thanks, Puneet. It's a combination of, I think, the comp on what we're seeing in the low risk, which is, as I mentioned, kind of more of a single-digit growth and not a double-digit growth right now, based on what we're seeing.

Speaker #2: And so still growing, but not at the same level as the rest of the Decipher risk categories. Obviously, given those guidelines, for NCCN. And so we expect that to continue and that's why we adjusted our outlook by about 1,000 tests.

Speaker #2: We also have very strong performance on the revenue line for Decipher as well. And so we've maintained Decipher around 20% revenue growth for the year, which is very healthy.

Speaker #2: We are extremely excited about the high-risk and intermediate that are both growing very, very nicely, given our competitive advantages in NCCN guidelines there. And the raft of evidence that we have supporting Decipher's use for clinical decisions in those two contexts.

Speaker #2: And when I say high risk, of course, that includes PCR and metastatic, which is a relatively new area for us as well. So, when you put it all together, those parts are growing nicely.

Speaker #2: Decipher, to your question on the collect go forward trajectory, Decipher is on this very straight line. I think I've mentioned it before. The when you look at it, it's got a very high R squared.

Speaker #2: And what's happening there, it's highly predictable in that regard. And I don't see any reason why that kind of trend line should change in the next couple of years.

Speaker #2: It seems to be around 20,000 tests a year plus or minus 1,000 or so. And that's the that's the variability that I would put on that.

Speaker #2: And like I said, I don't see much coming that would change that, other than in that time frame, we talked about, hopefully, we get the evidence to get low risk to be in a very similar category.

Speaker #5: And maybe just one thing while I have the opportunity to add on the Affirma number for next year, I just would like everyone to remember that we had the benefit of the NRR in our '26 results and our '26 guide.

Speaker #5: That will create a harder comp next year on Afirma. And then also, Afirma PPCs have been quite outstanding year-to-date. So just those two—please take those two things into account when you're looking at your '27 numbers for Afirma.

Speaker #4: Got it. That's helpful. And then when we think about ProSigna, there's a premenopausal and no-positive position that could benefit patients that could benefit. Could you elaborate sort of what's the discussions have been so far?

Speaker #4: How is the traction in the market just since the launch? How should we think about any volume numbers this year or next year for ProSigna?

Speaker #3: Well, from a market response, I'd say the market responded very, very favorably to the release of the optimum trial data. Obviously, premenopausal and high node burden in general is what caused probably the larger splash effect because it is so game-changing.

Speaker #3: Nevertheless, as I've been saying, we believe that our overall opportunity covers the gamut of the HER2 negative positive population. But nevertheless, that's why I imagine those positions are going to start and then expand from there if it ends up being a land and expand strategy with some positions and quite a few of them, I believe that that will be the case.

Speaker #3: Others, we've had discussions with are ready to pull the trigger wholesale because it's just easier to deal with one provider. And so the conversation turns very quickly from clinical to logistical.

Speaker #3: With regards to numbers, we're not quite there to guide with a target. We're going to allow ourselves the opportunity to collect data over the coming months before we can guide with some accuracy.

Speaker #4: And Puneet, just to remind everybody, I mean, there are 100 I mentioned there are hundreds of publications of support ProSigna's use in node-negative population.

Speaker #4: As well. So, to John's point, I mean, I think it's both the ease and also the level of evidence and the robustness behind ProSigna and the PAM50 signature that is also appealing.

Speaker #1: Got it. Okay. And just one last clarification—I might have missed this, but the Decipher growth was more than 20%, and now it's going to be at 20%, held constant?

Speaker #1: Just wanted to clarify on that point for this year guide.

Speaker #2: Yeah. To be clear, that's the revenue. The revenue guide is at 20%. And we gave very specific numbers for Q3 and Q4 for volume.

Speaker #2: Now, of course, don't forget there's always this quarterly volume variability that can come from the timing of receiving orders and tissue coming in the door and results being reported out.

Speaker #2: So you should always expect that level of a day's worth of variability, give or take. I mean, remember, given how much we've grown now in Decipher, a day's volume is 500 tests or so.

Speaker #2: And so it's very significant running through our lab every single day. And so you should expect the normal level of fluctuation on the quarterly numbers.

Speaker #2: We always say focus on the year. But overall, we're guiding roughly 20% growth for Decipher revenue growth for the year.

Speaker #5: And Puneet, the ASP gains that we've gotten are making up for the 1,000 tests delta in the volume guide.

Speaker #1: Got it. Okay.

Speaker #5: But there are prior periods in the back half of last year as a comp to take into account on pricing, just we can go through that later today if you want.

Speaker #1: I see. Okay. All right. Helpful. All right. Thanks.

Speaker #2: Thanks, Puneet.

Speaker #1: Thank you. Our next question comes from Mason Carico with Stevens. Your line is open.

Speaker #6: Hey, guys. Jumping between a few tonight. So sorry if this has been asked. I'll just keep it to one here. Could you update us on the true MRD pipeline?

Speaker #6: When should we expect to see the next data readout? And when will we learn more about the next submission of MOLDX or indication that you'll be targeting there?

Speaker #2: Yeah. Thanks, Mason. No, that hasn't been asked. Focusing on true MRD, well, obviously, we're very happy with the launch of our first test in muscle-invasive bladder cancer.

Speaker #2: We've always talked about that as kind of our landmark test, if you like, that helps us pilot our MRD approach in a relatively small but very important indication.

Speaker #2: That's where we're focused right now. In the meantime, we do have our development teams and our clinical teams working on the next levels of evidence development and the next assays.

Speaker #2: And so on. So we'll talk more about that when we're ready to launch those tests. We had a review just this week on the various studies that are going on and when they're expected to read out in different indications.

Speaker #2: And it's good. There's a lot. There's a lot of things happening. And hopefully, we'll add to that over the next few years as well.

Speaker #2: So excited for the bladder test to prove that the proof point here and then expand on that.

Speaker #6: Got it. Thank you.

Speaker #2: Thank you.

Speaker #1: Thank you. Our next question comes from Kyle Mixon with Cannock Originality. Your line is open.

Speaker #7: Hi, this is Alex with Cannock, more for Kyle Mixon. Thank you for taking our questions. Apologies if any of these might repeat—I'm jumping around a few different calls today. So, ProSigna NGS became available for order on June 8th, and it's been covered by a significant number of commercial payers in the past.

Speaker #7: Can you just comment on early test adoption? Do you believe that the optimist study results could be the key to guideline inclusion or either future or true test volume inflection?

Speaker #7: Thank you.

Speaker #2: Yeah. So I'll take that one at a time. So with regards to adoption, yes, we're very pleased with both the reaction that we've gotten from physicians I would say even unexpectedly from patients who've reached out to us directly asking how they can get the test and having seen now the first few results going back, it's just been very emotional and very gratifying to be able to start to help this important pool of patients.

Speaker #2: I think it absolutely signifies that we will see healthy adoption. We're very happy with the early KPIs, like I said, and with the response as well.

Speaker #2: There's always a bit of a lag in terms of setting up accounts and our logistical systems and ensuring that we are clear that there are procurement offices but we're happy with where we're tracking this soon after the launch.

Speaker #2: As it relates to the optimum trial, yes, we believe that it is generally acknowledged. There's level 1A evidence. And as such, should make its way to guidelines.

Speaker #2: What stands in our way between now and then is a publication. As we've communicated in the past, that's out of our hands this is an independent study run by a group of PIs.

Speaker #2: And we'll keep you posted as we make progress and as the guidelines review the data.

Speaker #1: Thank you. As a reminder, to ask a question, please press star 11 on your telephone. Again, that is star 11 to ask a question.

Speaker #1: Our next question comes from David Weissenberg with Piper Sandler. Your line is open.

Speaker #8: Hey, guys. This is Bron on for David Weissenberg. I've been jumping around as well. So I'll keep it brief and apologies if this has been asked.

Speaker #8: But maybe sticking with the pipeline, can you give us an update on the Nightingale study? I think previously you mentioned roughly 90% enrolled. I guess, can you share when we could expect to hear maybe intermediate data?

Speaker #8: Yeah, that'd be appreciated. Thank you.

Speaker #2: Yeah. Happy to. And no, it hasn't been asked. The Nightingale study, just to remind everybody, is our it's very extensive study that we have done on perceptive nasal swab test.

Speaker #2: And it was completed in enrollment last August. I believe it was. So we're about a year in now. Almost a year into having those first patient follow-ups.

Speaker #2: And it's going to be a while before that fully reads out. So we're treating that as one of our longer-term growth drivers. And so that's where we are on Nightingale looking forward to seeing how that reads out once we've got all the patients followed for at least one year, if not potentially two.

Speaker #1: Thank you. Our next question comes from Joseph Conway with Needham & Company. Your line is open.

Speaker #9: Hey, everyone. Thanks for taking our questions. Maybe one undeciphered to start out with. Really strong quarter. Just wondering maybe how much of the growth in the quarter, if you could dissect it, is maybe from expansion into a new use cases or newer use cases?

Speaker #9: Whether it be treatment intensification or the metastatic setting versus maybe just higher overall penetration in the use cases that you guys have had for the last handful of years.

Speaker #9: And then maybe just in the same vein, looking forward, what should those buckets do you think will be more repeatable over the next couple of years?

Speaker #9: Whether it be new indications or continued market penetration and existing.

Speaker #2: Yeah, I think the best way to actually think about it is the risk categories that we've been discussing and deciphering. And within each of those risk categories, more evidence comes out that adds either more prognostic or predictive claims.

Speaker #2: And a good example of that is in high risk. And metastatic where you've seen evidence come out in at ESMO for stampede and then at ASCO for enzymate, which keep adding these predictive claims.

Speaker #2: And it's one of the factors that is helping to grow the high-risk and metastatic category, which is one of the higher-growth driver categories within Deciphering.

Speaker #2: And intermediate continues to be an absolute stalwart of growth in terms of adding new with constantly adding new customers who have not ordered decipher before.

Speaker #2: We're seeing a nice uptick in the ordering rate per customer, which means they're expanding it across their patient population. Even within an intermediate risk category, for example.

Speaker #2: And so, other than low risk—which, again, just to remind people, is growing in terms of our adding new customers for low risk—

Speaker #2: But it's not growing at the double-digit rate. It's more at the single-digit rate now. So yeah, I think if you think about it like that, it's the growth in the next couple of years is going to come from high risk and intermediate.

Speaker #2: And then the growth after that is going to come from low-risk when we have the active surveillance evidence supporting that guidance.

Speaker #3: And the other thing outside of the prostate portion of the urology market for decipher, obviously, we're quite excited about the opportunity for bladder. It's just starting to get going.

Speaker #3: But the data evidence generation engine has been fully at work here now for a couple of years. And so we are incrementally excited about the bladder opportunity in the back half of the decade as well.

Speaker #9: Back half. Okay. Great. And then just one more. I know you guys get this question a decent amount, but just in terms of share buybacks or M&A, obviously, there's a you have a couple of launches and pipeline projects that are prioritizing a lot of investment now.

Speaker #9: But is there maybe a specific cash balance or profitability metric where you guys start thinking about buybacks more? Or maybe it's more about waiting until the launches and the pipeline is more in the rearview?

Speaker #9: I'm just wondering how you guys are thinking about that—if it's more of a dollar metric or more of a milestone kind of thing.

Speaker #2: Yeah. No, not really. I wouldn't say it was that scientific. It's really we look at the capital deployment in really three categories. One is continued investment in our business.

Speaker #2: And Rebecca ran through earlier some of the things that we're doing there. So it really helped drive the launch of these two new products.

Speaker #2: Our pipeline of additional new products and innovations. And also the core growth in decipherant and firma. So that's priority number one is invest in the business and continue to make it grow as we have done year after year after year.

Speaker #2: The second is you've mentioned it, but M&A we've done a few acquisitions as a company. And we do look at the market. And we look at a lot of different things.

Speaker #2: And we're very open to the right assets being a part of VERACYTE at the right time. And then the third category would be returning to investors in the way that you've described.

Speaker #2: And that, to me, at this point, when you think of all these other two categories and the things we've got ahead of us and the opportunities for us to deploy capital, is not top of mind.

Speaker #2: But we regularly look at that and discuss it. So you can rest assured, it's certainly on the docket. It's just that we've got plenty of things going on right now.

Speaker #9: Okay. Thanks, everyone, for taking your questions and congrats on the very strong quarter.

Speaker #2: Thank you.

Speaker #3: Thank you. Have a great afternoon.

Operator: Good day, and thank you for standing by. Welcome to the Veracyte Second Quarter 2026 Financial Results Webcast. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would like to hand the conference over to your speaker today, Kelly Gura, Director of Investor Relations. Please go ahead.

Operator: Good day, and thank you for standing by. Welcome to the Veracyte Q2 2026 Financial Results Webcast. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would like to hand the conference over to your speaker today, Kelly Gura, Director of Investor Relations. Please go ahead.

Speaker #1: Good day, and thank you for standing by. Welcome to the VERACYTE, second quarter, 2026, financial results webcast. At this time, all participants are in a listen-only mode.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone.

Speaker #1: You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded.

Speaker #1: I would now like to hand the conference over to your speaker today, Kelly Gura. Director of Investor Relations. Please go ahead.

Speaker #2: 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.

Kelly Gura: Good afternoon, everyone, 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. Forward-looking statements are subject to risks and uncertainties, the company can give no assurance that they will prove to be correct. The company undertakes no obligation to update any forward-looking statements, except as required by law.

Kelly Gura: Good afternoon, everyone, thank you for joining us today to review Veracyte's Q2 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. Forward-looking statements are subject to risks and uncertainties, the company can give no assurance that they will prove to be correct. The company undertakes no obligation to update any forward-looking statements, except as required by law.

Speaker #2: 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.

Kelly Gura: To better understand the risks and uncertainties that could cause actual results to differ, we refer you to the documents that Veracyte files with the Securities and Exchange Commission, including the most recent Forms 10-Q and 10-K. In addition, this call will include certain non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP financial measures are included in today's earnings release, accessible from the Investors section of Veracyte's website. I will turn the call over to Marc Stapley, Veracyte's CEO.

Speaker #2: I will now turn the call over to Marc Stapley, VERACYTE's CEO.

Speaker #3: Thank you, Kelly, and thank you all for joining us today. Q2 was a milestone quarter for VERACYTE as we launched ProSigna LDT and TrueMRD, catalyzing two of our key growth opportunities and meaningfully expanding our portfolio.

Marc Stapley: Thank you, Kelly. Thank you all for joining us today. Q2 was a milestone quarter for Veracyte as we launched Prosigna LDT and TruMRD, catalyzing two of our key growth opportunities and meaningfully expanding our portfolio. We advanced the clinical evidence supporting Prosigna, Decipher, and Afirma, while delivering another quarter of double-digit growth and industry-leading profitability. These achievements reflect years of investment in our platform, the growing body of evidence supporting our tests, and our differentiated commercial capabilities. More importantly, they enhance our ability to reach and positively impact more patients. Today, our portfolio helps guide patient care across multiple cancer types and increasingly across the cancer care continuum, from risk assessment through recurrence monitoring. As we continue to expand that impact, we are approaching one of the most meaningful milestones in our company's history, serving our one millionth patient.

Marc Stapley: Thank you, Kelly. Thank you all for joining us today. Q2 was a milestone quarter for Veracyte as we launched Prosigna LDT and TrueMRD, catalyzing two of our key growth opportunities and meaningfully expanding our portfolio. We advanced the clinical evidence supporting Prosigna, Decipher, and Afirma, while delivering another quarter of double-digit growth and industry-leading profitability. These achievements reflect years of investment in our platform, the growing body of evidence supporting our tests, and our differentiated commercial capabilities. More importantly, they enhance our ability to reach and positively impact more patients. Today, our portfolio helps guide patient care across multiple cancer types and increasingly across the cancer care continuum, from risk assessment through recurrence monitoring. As we continue to expand that impact, we are approaching one of the most meaningful milestones in our company's history, serving our one millionth patient.

Speaker #3: We advanced the clinical evidence supporting ProSigna, Decipher, and Affirma, while delivering another quarter of double-digit growth and industry-leading profitability. These achievements reflect years of investment in our platform, the growing body of evidence supporting our tests, and our differentiated commercial capabilities.

Speaker #3: More importantly, they enhance our ability to reach and positively impact more patients. Today, our portfolio helps guide patient care across multiple cancer types and increasingly across the cancer care continuum, from risk assessment through recurrence monitoring.

Speaker #3: As we continue to expand that impact, we are approaching one of the most meaningful milestones in our company's history, serving our 1 millionth patient.

Marc Stapley: The recent launches of Prosigna LDT and TruMRD for muscle-invasive bladder cancer, or MIBC, represent the culmination of years of hard work. To say I'm proud of these accomplishments and of our team for delivering them would be an understatement. I want to thank our employees and external collaborators whose expertise and partnership made these outcomes possible. I'm also grateful to the physicians who have worked with us to advance cancer care and to the many thousands of patients whose participation in research helped make these innovations possible. Since launching the Prosigna test in the US following the presentation of the practice-changing OPTIMA trial results at ASCO, we've seen tremendous enthusiasm from both physicians and patients. Prosigna helps guide treatment decisions at a pivotal point in the breast cancer care journey by quantifying the risk of recurrence up to 10 years and providing a likelihood of chemotherapy benefit.

Marc Stapley: The recent launches of Prosigna LDT and TrueMRD for muscle-invasive bladder cancer, or MIBC, represent the culmination of years of hard work. To say I'm proud of these accomplishments and of our team for delivering them would be an understatement. I want to thank our employees and external collaborators whose expertise and partnership made these outcomes possible. I'm also grateful to the physicians who have worked with us to advance cancer care and to the many thousands of patients whose participation in research helped make these innovations possible. Since launching the Prosigna test in the US following the presentation of the practice-changing OPTIMA trial results at ASCO, we've seen tremendous enthusiasm from both physicians and patients. Prosigna helps guide treatment decisions at a pivotal point in the breast cancer care journey by quantifying the risk of recurrence up to 10 years and providing a likelihood of chemotherapy benefit.

Speaker #3: I want to thank our employees and external collaborators whose expertise and partnership made these outcomes possible. I'm also grateful to the physicians who have worked with us to advance cancer care and to the many thousands of patients whose participation in research helped make these innovations possible.

Speaker #3: Since launching the ProSigna test in the U.S., following the presentation of the practice-changing Optima trial results at ASCO, we've seen tremendous enthusiasm from both physicians and patients.

Speaker #3: ProSigna helps guide treatment decisions at a pivotal point in the breast cancer care journey, by quantifying the risk of recurrence up to 10 years and providing a likelihood of chemotherapy benefit.

Marc Stapley: Backed by the most rigorous clinical trial demonstration to date, Prosigna achieves this by providing intrinsic subtyping classification information from the well-validated, well-published PAM50 signature that highlights the underlying biology driving the patient's cancer. This helps identify patients who can benefit from chemotherapy and those who may be able to safely avoid it. Prosigna is foundational to our breast cancer franchise and represents one of the most significant product launches in Veracyte's history. As a reminder, OPTIMA is an independent prospective phase III randomized trial that enrolled more than 4,400 high-risk early-stage breast cancer patients. The study met its primary endpoint and demonstrated that more than two-thirds of clinically high-risk patients may safely avoid chemotherapy without compromising outcomes. Importantly, this includes premenopausal women and patients with up to nine positive lymph nodes.

Speaker #3: Backed by the most rigorous clinical trial demonstration to date, ProSigna achieves this by providing intrinsic subtyping classification information from the well-validated, well-published PAM-50 signature, that highlights the underlying biology driving the patient's cancer.

Speaker #3: This helps identify patients who can benefit from chemotherapy, and those who may be able to safely avoid it. ProSigna is foundational to our breast cancer franchise, and represents one of the most significant product launches in VERACYTE's history.

Speaker #3: As a reminder, Optima is an independent prospective phase-3 randomized trial that enrolled more than 4,400 high-risk early-stage breast cancer patients. The study met its primary endpoint and demonstrated that more than two-thirds of clinically high-risk patients may safely avoid chemotherapy without compromising outcomes.

Speaker #3: Importantly, this includes premenopausal women, and patients with up to 9 positive lymph nodes. The Optima results also generated significant media retention, making Optima and ProSigna the most covered diagnostic story at ASCO.

Marc Stapley: The OPTIMA results also generated significant media attention, making OPTIMA and Prosigna the most covered diagnostic story at ASCO. Looking ahead, publication in a leading peer-review journal will represent another important milestone, further validating this level 1A prospective evidence supporting Prosigna and its potential inclusion in future clinical guidelines. We see a significant opportunity to expand access to Prosigna in the US, where approximately 225,000 patients are diagnosed with ER-positive, HER2-negative breast cancer each year. We believe many of these patients may benefit from the clinically validated insights Prosigna provides to help inform treatment decisions. With OPTIMA, Prosigna has the only clinically validated evidence for premenopausal women and patients with higher nodal involvement. This expands and strengthens the clinical utility already demonstrated in many prior studies, including as a prognostic test for node-negative patients.

Speaker #3: Looking ahead, publication in a leading peer-reviewed journal will represent another important milestone, further validating this level 1A prospective evidence supporting ProSigna and its potential inclusion in future clinical guidelines.

Speaker #3: We see a significant opportunity to expand access to ProSigna in the U.S., where approximately 225,000 patients are diagnosed with ER-positive HER2-negative breast cancer each year.

Speaker #3: We believe many of these patients may benefit from the clinically validated insights ProSigna provides to help inform treatment decisions. With Optima, ProSigna has the only clinically validated evidence for premenopausal women and patients with higher nodal involvement.

Marc Stapley: There are 157 publications to date featuring Prosigna and more than 1,200 publications featuring the PAM50 classifier on which the test was built. In the near term, we are focused on educating key opinion leaders and driving adoption in high-volume centers. While menopausal status and nodal involvement may present the catalyst for the initial conversation, we believe healthcare providers will choose a test they can use with confidence across all ER-positive, HER2-negative patients, rather than stratifying their use based on these differentiating factors alone. We have been thrilled by the quality and breadth of engagement since launch, which gives us confidence our commercial strategy is on point. We are now actively engaged with more than 100 institutions that help shape standards of care in breast cancer, including nationally recognized academic cancer centers, large integrated health systems, and regional oncology networks.

Speaker #3: In the near term, we are focused on educating key opinion leaders and driving adoption in high-volume centers. While menopausal status and nodal involvement may present a catalyst for the initial conversation, we believe healthcare providers will choose a test they can use with confidence across all ER-positive HER2-negative patients, rather than stratifying their use based on these differentiating factors alone.

Marc Stapley: Many of these organizations are evaluating broad adoption of Prosigna across their breast cancer programs, and in some cases, have expressed interest in using Prosigna for all hormone receptor-positive patients that they treat. Based on this strong engagement, the growing activity on our ordering platform, and our customers' desire to start incorporating Prosigna into existing practice management workflows, we are expanding our sales force ahead of our original plan to capture the demand we are seeing. We are making progress on reimbursement and continue to have constructive discussions with MolDX regarding Medicare coverage. We are encouraged by the engagement state and look forward to providing updates as those discussions progress. I couldn't be more excited about the momentum we have seen since launch.

Speaker #3: We are making progress on reimbursement and continue to have constructive discussions with Muldex regarding Medicare coverage. We are encouraged by the engagement to date and look forward to providing updates as those discussions progress.

Marc Stapley: While early, the response from patients, clinicians, key opinion leaders, and the broader oncology community reinforces our conviction that Prosigna can become a meaningful growth driver for Veracyte, and even more importantly, improve quality of life for the hundreds of thousands of patients dealing with breast cancer. Turning now to MRD. We launched our first test on our TrueMRD platform in June after securing Medicare reimbursement for recurrence monitoring in patients with MIBC following radical cystectomy. The TrueMRD monitoring test for MIBC represents the first commercial application of our MRD platform and our entry into this rapidly growing market. Importantly, our whole genome approach to MRD is extensible well beyond bladder cancer, with the potential to support multiple tumor types and clinical applications over time.

Speaker #3: Turning now to MRD, we launched our first test on our TrueMRD platform in June, after securing Medicare reimbursement for recurrence monitoring in patients with MIBC following radical cystectomy.

Speaker #3: The TrueMRD monitoring test for MIBC represents the first commercial application of our MRD platform, and our entry into this rapidly growing market. Importantly, our whole genome approach to MRD is extensible, well beyond bladder cancer.

Speaker #3: With the potential to support multiple tumor types, and clinical applications over time. TrueMRD for MIBC is the first and only commercially available MRD test to utilize whole genome sequencing for not just the landmark test, but also through longitudinal monitoring with all subsequent liquid biopsy surveillance tests.

Marc Stapley: TrueMRD for MIBC is the first and only commercially available MRD test to utilize whole genome sequencing for not just the landmark test, but also through longitudinal monitoring with all subsequent liquid biopsy surveillance tests. We believe this is a meaningful differentiator, offering a broader view of tumor biology and the ability to track tumor evolution over time, capabilities we expect will become increasingly important as oncology research and testing advances. More broadly, we believe Veracyte is uniquely positioned to serve patients across the bladder cancer continuum. Today, Decipher Bladder helps physicians risk stratify patients, and with TrueMRD for MIBC, we are adding recurrence monitoring at another critical point in the patient journey. Over time, we expect continued evidence generation, product enhancements, and portfolio expansion to further strengthen our position in bladder cancer management.

Speaker #3: We believe this is a meaningful differentiator. Offering a broader view of tumor biology, and the ability to track tumor evolution over time. Capabilities we expect will become increasingly important as oncology research and testing advances.

Speaker #3: More broadly, we believe VERACYTE is uniquely positioned to serve patients across the bladder cancer continuum. Today, Decipher Bladder helps physicians risk-stratify patients, and with TrueMRD for MIBC, we are adding recurrence monitoring at another critical point in the patient journey.

Speaker #3: Over time, we expect continued evidence generation, product-enhancements, and portfolio expansion to further strengthen our position in bladder cancer management. We are leveraging the strong brand we have built through Decipher and our longstanding relationships across urology and radiation oncology to accelerate awareness and adoption of our first TrueMRD test.

Marc Stapley: We are leveraging the strong brand we have built through Decipher and our long-standing relationships across urology and radiation oncology to accelerate awareness and adoption of our first TrueMRD test. In parallel, we are investing in the operational infrastructure, workflow enhancements, and automation needed to support larger testing volumes as we intentionally expand the platform over time. While we remain in the early stages of commercialization of TrueMRD for MIBC, we have been encouraged by the initial feedback from physicians who recognize the advantages of a truly whole genome approach and the complementarity to our overall bladder program. We continue to believe that the TrueMRD platform has the potential to become an important long-term growth driver for Veracyte. Moving on to Decipher Prostate. We delivered another strong quarter of revenue growth, up 20% year over year, driven primarily by 17% volume growth, with improved ASP contributing the balance.

Speaker #3: While we remain in the early stages of commercialization of TrueMRD for MIBC, we have been encouraged by the initial feedback from physicians who recognize the advantages of a truly whole genome approach and the complementarity to our overall bladder program.

Speaker #3: We continue to believe that the TrueMRD platform has the potential to become an important long-term growth driver for VERACYTE. Moving on to Decipher Prostate.

Speaker #3: We delivered another strong quarter of revenue growth, up 20% year over year, driven primarily by 17% volume growth, with improved ASP contributing the balance.

Speaker #3: ASP growth reflects the significant focused work our market access and billing teams completed over the last year, including operational improvements, strong payer engagement, and expanded coverage across multiple accounts, which led to higher recovery per test.

Marc Stapley: ASP growth reflects the significant focused work our market access and billing teams completed over the last year, including operational improvements, strong payer engagement, and expanded coverage across multiple accounts, which led to higher recoveries per test. With just under 30,000 tests resulted in Q2, we continue to see strong underlying demand for Decipher. Having said that, we are taking our expectations for volume for the year down by approximately 1% or slightly more than 1,000 tests, primarily in the low-risk setting. Importantly, our expectations for the rest of the business remain on track. Low-risk disease represents an important growth opportunity for Decipher and one where we are also actively investing to generate additional high-quality evidence. The 2025 NCCN guideline update reinforced the need for additional high-quality evidence supporting the use of genomic testing in low-risk patients considering active surveillance.

Speaker #3: This 2025 NCCN guideline update reinforced the need for additional high-quality evidence supporting the use of genomic testing in low-risk patients considering active surveillance. We have a growing clinical data pipeline that we believe will address this unmet need, with several prospective and retrospective studies underway evaluating Decipher in active surveillance and low-risk patient populations.

Marc Stapley: We have a growing clinical data pipeline that we believe will address this unmet need with several prospective and retrospective studies underway evaluating Decipher in active surveillance and low-risk patient populations with initial readouts as early as 2027. As these data emerge, we believe they have the potential to further expand the clinical foundation for Decipher, supporting broader low-risk adoption and guideline inclusion over time. Turning to the balance of the Decipher business, which grew approximately 20% in Q2 2026 off of a challenging prior year comp. Recall that Q2 2025 benefited from the initial step-up in testing following the 2024 NCCN guideline updates made late in the year, which reflected Decipher's position as the only gene expression test supported by high-quality evidence. That step up has proved durable, and the underlying order trends this quarter give us confidence that the Decipher business is on a consistent trajectory of growth.

Speaker #3: With initial readouts as early as 2027. As these data emerge, we believe they have the potential to further expand the clinical foundation for Decipher, supporting broader low-risk adoption and guideline inclusion over time.

Speaker #3: Turning to the balance of the Decipher business, which grew approximately 20% in Q2 '26 off of a challenging prior year comp. Recall that Q2 2025 benefited from the initial step-up in testing, following the 2024 NCCN guideline updates made late in the year, which reflected Decipher's position as the only gene expression test supported by high-quality evidence.

Speaker #3: That step-up has proved durable, and the underlying order trends this quarter give us confidence that the Decipher business is on a consistent trajectory of growth.

Speaker #3: For example, in Q2, we delivered our highest sequential volume growth since that exceptional quarter last year. This growth was driven by both the strong increase in new ordering positions, and deeper penetration within our existing base.

Marc Stapley: For example, in Q2, we delivered our highest sequential volume growth since that exceptional quarter last year. This growth was driven by both a strong increase in new ordering physicians and deeper penetration within our existing base. Orders per physician reached a new record, reflecting broader Decipher use by our core physician base across more of their patients. Together, these trends show that physicians are increasingly relying on Decipher to provide critical information that helps guide treatment decisions for patients with prostate cancer across risk groups. We were particularly encouraged by strong ordering trends in intermediate and high-risk localized disease, as well as post-prostatectomy and biochemical recurrence. These remain some of the largest and most attractive growth opportunities for Decipher, reflecting areas where the clinical evidence base is strongest, guideline support is uniquely established, and physician adoption continues to deepen.

Speaker #3: We were particularly encouraged by strong ordering trends in intermediate and high-risk localized disease, as well as post-prostatectomy and biochemical recurrence. These remain some of the largest and most attractive growth opportunities for Decipher, reflecting areas where the clinical evidence base is strongest, guideline support is uniquely established, and physician adoption continues to deepen.

Speaker #3: More broadly, evidence generation remains robust across these settings, as well as the metastatic setting, a critical component to ensuring continued adoption and long-term growth.

Marc Stapley: More broadly, evidence generation remains robust across these settings as well as the metastatic setting, a critical component to ensuring continued adoption and long-term growth. During the quarter, Decipher Prostate was featured in more than 35 publications and abstracts, including Level 1B evidence from the ENZAMET trial presented at ASCO. This study provided new predictive evidence supporting Decipher Prostate to help inform use of triplet therapy in metastatic prostate cancer, identifying patients most likely to benefit from the addition of chemotherapy to standard doublet hormone therapy. Looking ahead, we are excited about the steady drumbeat of upcoming conference presentations in H2. At ASTRO in September, Decipher is expected to be featured in six oral presentations, including three focused on treatment intensification with androgen deprivation therapy, or ADT, a key area of clinical decision-making in intermediate risk and post-RP biochemical recurrent prostate cancer.

Speaker #3: During the quarter, Decipher Prostate was featured in more than 35 publications and abstracts, including level 1b evidence from the EnzaMed trial presented at ASCO.

Speaker #3: This study provided new predictive evidence supporting Decipher Prostate to help inform use of triplet therapy in metastatic prostate cancer. Identifying patients most likely to benefit from the addition of chemotherapy to standard doublet hormone therapy.

Speaker #3: Looking ahead, we are excited about the steady drumbeat of upcoming conference presentations in the second half of the year. At Astro in September, Decipher is expected to be featured in six oral presentations, including three focused on treatment intensification with androgen deprivation therapy, or ADT, a key area of clinical decision-making in intermediate risk and post-RP biochemical recurrent prostate cancer.

Marc Stapley: We are particularly excited about upcoming analyses from NRG/RTOG 0815, which we believe have the potential to further establish Decipher's role in personalizing treatment with radiation and ADT for intermediate-risk prostate cancer patients, our largest indication. We are also looking forward to results from the SPORT trial, evaluating whether PAM50-based subtyping can provide additional clinically useful information in prostate cancer. Together with additional data expected at ESMO later this year supporting Decipher's utility in high-risk disease, these presentations represent additional data expanding the clinical utility of our tests across the prostate cancer continuum. Beyond prostate cancer, we saw encouraging Q2 order trends for Decipher Bladder, which helps physicians risk-stratify patients with muscle-invasive as well as non-muscle-invasive disease and guide treatment decisions.

Speaker #3: Beyond prostate cancer, we saw encouraging Q2 order trends for Decipher bladder, which helps physicians risk-stratify patients with muscle-invasive as well as non-muscle-invasive disease, and guide treatment decisions.

Speaker #3: The test was featured in 13 publications and abstracts in Q2, including six abstracts at AUA, and more expected later this year at ESMO. Highlighting our growing body of evidence across the bladder cancer continuum.

Marc Stapley: The test was featured in 13 publications and abstracts in Q2, including six abstracts at AUA and more expected later this year at ESMO, highlighting our growing body of evidence across the bladder cancer continuum. Looking ahead, we remain highly confident in Decipher's long-term growth opportunity, supported by expansion of our customer base, durable and broader physician adoption, an expanding body of clinical and real-world evidence, including multiple important study readouts expected over the next few years, and continued innovation across our platform. Turning now to Afirma. We delivered another strong quarter with approximately 18,600 tests, representing 10% year-over-year volume growth and 18% revenue growth. We were pleased to see another quarter of increased utilization among existing physicians, continued expansion of our ordering physician base, and ongoing market share gains, reinforcing Afirma's position as the market leader in thyroid nodule molecular diagnostics.

Speaker #3: Turning now to Affirma, we delivered another strong quarter, with approximately 18,600 tests, representing 10% year-over-year volume growth and 18% revenue growth. We were pleased to see another quarter of increased utilization among existing physicians, continued expansion of our ordering physician base, and ongoing market share gains, reinforcing Affirma's position as the market leader in thyroid nodule molecular diagnostics.

Marc Stapley: Revenue growth benefited from both sustained ASP gains and favorable reimbursement wins from commercial payers. We also continue to realize the benefits of our V2 transcriptome workflow, which has improved our no-result rate significantly, resulting in more patients receiving a test result and contributing to approximately 400 basis points of volume growth in the quarter. Evidence generation remains a key component of the Afirma growth strategy, as it does for all of our tests. Afirma was featured in 10 conference abstracts during the quarter across leading medical meetings, including American Association of Endocrine Surgeons, American Association of Clinical Endocrinology, and the Endocrine Society. Multiple peer-reviewed manuscripts were published during the quarter, and growing interest from independent investigators evaluating Afirma's clinical utility in real-world practice continues to be a competitive differentiation.

Speaker #3: Resulting in more patients receiving a test result, and contributing to approximately 400 basis points of volume growth in the quarter. Evidence generation remains a key component of the Affirma growth strategy, as it does for all of our tests.

Speaker #3: Affirma was featured in 10 conference abstracts during the quarter, across leading medical meetings, including American Association of Endocrine Surgeons, American Association of Clinical Endocrinology, and the Endocrine Society.

Marc Stapley: We are encouraged by the growing momentum behind Afirma GRID, which is supporting an expanding pipeline of academic and industry collaborations. These GRID collaborations fuel a virtuous cycle of expanding evidence, leading to new publications, scientific presentations, and molecular insights that will continue to strengthen the evidence base around Afirma. We expect to see more Afirma publications and scientific abstracts this year than in 2025, further accelerating that momentum. Overall, we remain very pleased with Afirma's performance and believe the combination of continued adoption, share gains, operational improvements, and expanding clinical evidence positions the franchise for continued growth. In closing, seeing years of investment and innovation translate into meaningful new opportunities for growth is incredibly rewarding and a testament to the strength of our strategy, our execution, and most importantly, our people.

Speaker #3: We expect to see more Affirma publications and scientific abstracts this year than in 2025, further accelerating that momentum. Overall, we remain very pleased with Affirma's performance, and believe the combination of continued adoption, share gains, operational improvements, and expanding clinical evidence positions the franchise for continued growth.

Marc Stapley: Our mission remains centered on improving patient outcomes, and today, our portfolio is helping clinicians and patients make more informed treatment decisions across multiple cancer types and increasingly across the cancer care continuum. Supported by the continued strength of our core franchises, a robust pipeline of clinical evidence, and multiple opportunities for future innovation, we remain confident in our ability to continue to deliver durable double-digit growth for the foreseeable future. With that, I'll turn the call over to Rebecca.

Speaker #3: Supported by the continued strength of our core franchises, a robust pipeline of clinical evidence, a multiple opportunities for future innovation, we remain confident in our ability to continue to deliver durable double-digit growth for the foreseeable future.

Speaker #3: With that, I'll turn the call over to Rebecca.

Speaker #1: Thanks, Marc. We delivered total revenue of $150.3 million in the second quarter, representing 15% year-over-year growth. Total volume increased to approximately $51,000 tests, up 13% compared to the same period in 2025.

Rebecca Chambers: Thanks, Marc. We delivered total revenue of $150.3 million in Q2, representing 15% year-over-year growth. Total volume increased to approximately 51,000 tests, up 13% compared to the same period in 2025. We generated $45.8 million of cash from operations, ending the quarter with $485.2 million in cash equivalents, and short-term investments. Testing revenue for the quarter was $145.7 million, an increase of 19% year-over-year, driven by Decipher and Afirma growth of 20% and 18%, respectively. Total testing volume was 48,389 tests, representing 14% year-over-year growth. Testing ASP was $3,010, up 4% to the prior year and inclusive of approximately $4.5 million of prior period collections, or PPCs. Excluding PPCs, normalized ASP increased 3% to approximately $2,900, driven by the benefits of operational efforts put into place over the course of 2025, which have led to sustained pricing gains in H1 of this year.

Rebecca Chambers: Turning to gross margin and operating expenses, I'll focus on our non-GAAP results. Non-GAAP gross margin was 74.9%, up 340 basis points year-over-year, driven by strength in our testing business. Testing gross margin increased 200 basis points to 76%, reflecting operational efficiencies from our V2 transcriptome workflow, higher ASP, and PPCs. Non-GAAP operating expenses increased 16% year-over-year to $70 million. As we shared last quarter, certain IT expenses associated with software development and project management resources previously reported in G&A have been moved directly into R&D as they are fully dedicated to our product development objectives. As a result, R&D expense increased $12.1 million year-over-year to $26.3 million, approximately half of which were driven by our organizational changes and the other half driven by increased clinical and product investments.

Speaker #1: As a result, R&D expense increased 12.1 million year-over-year to $26.3 million, approximately half of which were driven by our organizational changes and the other half driven by increased clinical and product investment.

Speaker #1: Sales and marketing expense increased 2.4 million to $25.5 million, reflecting hiring to support our existing portfolio as well as the recent launches of ProSigna LDT and True MRD.

Rebecca Chambers: Sales and marketing expense increased $2.4 million to $25.5 million, reflecting hiring to support our existing portfolio, as well as the recent launches of Prosigna LDT and TruMRD. G&A expense decreased $4.8 million to $18.1 million, primarily due to the organizational changes previously mentioned. From a profitability standpoint, we delivered GAAP net income of $25.5 million in the quarter. Adjusted EBITDA was $44 million or 29.2% of revenue, up 23% year-over-year and above our long-term target of 25%. This level of profitability continues to demonstrate our operating leverage as we both invest in our growth drivers and generate meaningful cash. Turning to our 2026 outlook, we are raising full year total revenue guidance to $590 million to $596 million, representing 14% to 15% year-over-year growth compared to our prior range of $582 million to $592 million.

Speaker #1: Adjusted EBITDA was $44 million, or 29.2% of revenue, up 23% year-over-year and above our long-term target of 25%. This level of profitability continues to demonstrate our operating leverage as we both invest in our growth drivers and generate meaningful cash.

Speaker #1: Turning to our 2026 outlook, we are raising full-year total revenue guidance to $590 million, the $596 million, representing 14 to 15 percent year-over-year growth, compared to our prior range of $582 million to $592 million.

Rebecca Chambers: This reflects expected testing revenue of $576 million to 582 million, representing 17% to 18% year-over-year growth, compared to our prior range of $570 million to $580 million, with testing volume growth modestly below revenue. Included in our guidance is approximately $10 million of other testing revenue from cytology services and Decipher Bladder. Further, our guidance assumes approximately 20% Decipher revenue growth. Based on current ordering trends and normal seasonality, we expect approximately 31,000 tests in Q3 and 33,000 in Q4. Given PPCs collected year-to-date and stronger than expected ASP performance this year, we now expect ASP to be slightly higher this year compared to 2025. For Afirma, we have increased our revenue guidance to approximately 12% to 14% year-over-year growth, driven by favorable year-to-date PPCs, ongoing ASP improvement, and an anticipated no result rate of benefit of approximately 3% for the year.

Speaker #1: Included in our guidance is approximately $10 million of other testing revenue from cytology services and Decipher bladder. Further, our guidance assumes approximately 20% Decipher revenue growth.

Speaker #1: Based on current ordering trends and normal seasonality, we expect approximately 31,000 testing Q3 and 33,000 in Q4. And given PPCs collected year-to-date and stronger than expected ASP performance this year, we now expect ASP to be slightly higher this year compared to 2025.

Speaker #1: Due to typical seasonality and in line with prior years, we expect Q3 volume to be slightly down sequentially with a larger step-up in Q4.

Rebecca Chambers: Due to typical seasonality and in line with prior years, we expect Q3 volume to be slightly down sequentially with a larger step-up in Q4. On revenue, Afirma is expected to step down sequentially, given close to $3 million of PPCs in Q2. As Marc shared, we are pleased with the early feedback on our recently launched test. Given we do not yet have Medicare reimbursement for Prosigna and are still early in the launch process, our revenue guidance excludes contribution from these tests. Moving to profitability, we are maintaining our full year adjusted EBITDA guidance of greater than 26%, reflecting our expected investment to support our growth initiatives throughout the year. As always, while we plan expenses on an annual basis, adjusted EBITDA may fluctuate quarter to quarter. In closing, Q2 was a milestone quarter for Veracyte.

Speaker #1: On revenue, Affirma is expected to step down sequentially, given close to $3 million of PPCs in the second quarter. As Marc shared, we are pleased with the early feedback on our recently launched tests.

Speaker #1: Given we do not yet have Medicare reimbursement for ProSigna and are still early in the launch process, our revenue guidance excludes contribution from these tests.

Speaker #1: As always, while we plan expenses on an annual basis, adjusted EBITDA may fluctuate quarter to quarter. In closing, Q2 was a milestone quarter for VERACYTE.

Rebecca Chambers: We successfully launched two important new products that expand our ability to serve patients across the cancer care continuum, while also delivering strong double-digit revenue growth, profitability, and cash generation. Combined with the strength of our core business, these achievements reinforce our confidence in our long-term growth opportunity and position us well to continue to deliver durable double-digit growth. We will now move into the Q&A portion of the call. Operator, please open the line.

Speaker #1: We will now move into the Q&A portion of the call. Operator, please open the line.

Speaker #2: As a reminder, to ask a question, please press star 11 on your telephone. And wait for your name to be announced. To withdraw your question, please press star 11 again.

John Leite: As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. In the interest of time, we ask that you please limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster. Our first question comes from Tycho Peterson with Jefferies. Your line is open.

Operator: As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. In the interest of time, we ask that you please limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster. Our first question comes from Tycho Peterson with Jefferies. Your line is open.

Speaker #2: In the interest of time, we ask that you please limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster.

Speaker #2: Our first question comes from Tycho Peterson with Jefferies. Your line is open.

Speaker #3: Hey, team. This is Lauren on for Tycho. Thanks so much for taking the question. My first one would be on Decipher. With the lowered guidance about 1K tests, is this are you seeing a threat specifically from AI-based testing?

[Analyst] (Jefferies): Hey, team. This is Lauren on for Tycho. Thanks so much for taking the question. My first one would be on Decipher. With the lowered guidance about 1,000 tests, are you seeing a threat specifically from AI-based testing? Kind of off of that topic, if these approaches kind of continue to improve, what do you see as the future workflow? Would it be an AI first triage model followed by molecular confirmation, or are there certain indications where molecular profiling will kind of remain the gold standard? Thanks.

[Analyst] (Jefferies): Hey, team. This is Lorna on for Tycho. Thanks so much for taking the question. My first one would be on Decipher. With the lowered guidance about 1,000 tests, are you seeing a threat specifically from AI-based testing? Kind of off of that topic, if these approaches kind of continue to improve, what do you see as the future workflow? Would it be an AI first triage model followed by molecular confirmation, or are there certain indications where molecular profiling will kind of remain the gold standard? Thanks.

Speaker #3: And kind of off that topic, if these approaches kind of continue to improve, what do you see as the future workflow? Would it be an AI-first triage model, followed by a molecular confirmation, or are there certain indications where molecular profiling will kind of remain the gold standard?

Speaker #3: Thanks.

Marc Stapley: Hi, Lauren. Thanks for the question. No, we're not actually. The reduction in our internal expectations for Decipher for the year is only in the low category, where we took it down by about 1,000 tests. Most of which is actually behind us in Q2. We think the rationale for that and what we're seeing there is the guideline change that happened at the end of last year, where effectively for every test, whether molecular or AI-based, for active surveillance, it was taken out of guidelines. It's going to depend on, for that to come back and grow in double digits. It's still growing in single digits for us, but for it to come back and grow in double digits, it's going to need the evidence that we talked about.

Speaker #4: And so it's going to depend on for that to come back and grow in double digits, it's still growing in single digits for us, but for it to come back and grow in double digits, it's going to need the evidence that we talked about.

Speaker #4: So we had slightly higher expectations for that coming into the year than we currently do in low-risk only. And so that affects every test on the market in similar ways.

Marc Stapley: We had slightly higher expectations for that coming into the year than we currently do in low risk only. That affects every test on the market in similar ways. Now, not everybody has the same comp. In fact, low was very good for us in this quarter last year. I'm sure for others, they have different starting points. From a share standpoint, we're not really seeing any difference at all. I think to the second part of your question, it doesn't really feature when that's not the fact here. We still think that molecular and AI are complementary. We already know they measure different parts of the biology and different things and we've got a publication that we're working on that covers that we talked about previously.

Speaker #4: Now, not everybody has the same comp. In fact, low was very good for us in this quarter last year. And I'm sure for others, they have different starting points.

Marc Stapley: I think the two could potentially coexist at some point, I don't think it's necessarily a one or the other model. In fact, physicians consistently tell us more information is better than less. Anything to add? No.

Speaker #4: Anything to add? No.

Speaker #1: I'll just add one quick thing, if you don't mind. And that really is to highlight the strength that we saw in the intermediate and high-risk category, as well as the durability of that strength, given incremental data that we hope will be released here shortly, as Marc mentioned on the call.

Rebecca Chambers: I'll just add one quick thing, if you don't mind. That really is to highlight the strength that we saw in the intermediate and high-risk category, as well as the durability of that strength given incremental data that we hope will be released here shortly, as Marc mentioned on the call. Yes, we have taken down the low category by a day or two across a portion of the year. I think we are seeing great strength and performance as expected in intermediate and high. Those are the areas where we have the most evidence, we have the most guidelines, and that will change here for low as well over the course of 2027, 2028, 2029.

Speaker #1: And so yes, we have taken down the low-category by a day or two across the portion of the year, but I think we are seeing great strength and performance as expected in intermediate and high.

Speaker #1: And those are the areas where we have the most evidence, we have the most guidelines, and that will change here for low as well over the course of 2027, 2028, 2029.

Speaker #1: So I think it's just, to me, the way I think about it is we have a great growth driver today, and low is an incremental is an opportunity for incremental growth in the subsequent years.

Rebecca Chambers: I think, to me, the way I think about it is we have a great growth driver today, and low is an opportunity for incremental growth in the subsequent years and is a very untapped market at this point in time.

Speaker #1: And as a very untapped market at this point in time.

Speaker #4: And Lauren, maybe if I can sorry, just to add to what Rebecca said. While we expect these low studies to read out in 2027, 2028, we don't know if they're going to read out positively or not.

Marc Stapley: Lauren, maybe if I can, sorry, just to add to what Rebecca said. While we expect these low studies to read out in 2027, 2028, we don't know if they're going to read out positively or not. The good news is we have multiple shots on goal with multiple studies coming our way.

Speaker #4: But the good news is we have multiple shots on goal. With multiple studies coming our way.

Speaker #1: That have been enrolling now for six, seven years, so. Exciting times.

Rebecca Chambers: That have been enrolling now for six, seven years. Exciting times.

Speaker #3: That's super helpful. Thank you. And then just one last one on kind of expansion of the market for ProSigna. I guess, what percent of the existing OncoType market do you think is contestable over the next three to five years?

[Analyst] (Jefferies): That's super helpful. Thank you. Just one last one on kind of expansion of the market for Prosigna. I guess, what percent of the existing Oncotype market do you think is contestable over the next three to five years? Off of that, what do you expect the earliest uptake in, whether it's across the node-positive populations or just kind of color there? Thanks.

Speaker #3: And off of that, what do you expect the earliest uptake in, whether it's across the node-positive populations or just kind of color there? Thanks.

Speaker #5: This is John. Thanks for the question. Yeah, we're not limiting ourselves to any specific sub-segment of the breast market. We believe the entirety of the HER2-negative ER-positive population is addressable by our value proposition.

John Leite: This is Jon. Thanks for the question. We're not limiting ourselves to any specific subsegments of the breast market. We believe the entirety of the HER2-negative, ER-positive population is addressable by our value proposition. The latest data from OPTIMA happens to add predictive claims to the node-positive population, both post-menopausal and pre-menopausal. The large value proposition here always starts with an accurate risk stratification to understand what is the real risk of progression in the 10-year timeframe. For that, we already have level 1A evidence across the board. Like I said, we're excited by the OPTIMA results, but we're not limiting ourselves to just that node-positive population.

Speaker #5: The latest data from Optima happens to add predictive claims to the node-positive population both postmenopausal and premenopausal. But one of the large value proposition here, we start with an accurate risk stratification to understand what is the real risk of progression in the 10-year time frame.

Speaker #5: And for that, we already have level 1A evidence across the board. So like I said, we're excited by the Optima. Our results, but we're not limiting ourselves to just that node-positive population.

Speaker #1: And maybe one last thing to add. We haven't gone out and quantified what portion of the market we think we can take over the next three to five years, but I would say, as Marc cited in the script, based on some early feedback, we are very confident in our ability to have sustained growth with ProSigna and have had numerous conversations with centers that are large in nature who are contemplating not just dabbling and having more active procedures not procedures, I'm sorry, more active engagement to the point of effectively fully switching.

Rebecca Chambers: Maybe one last thing to add. We haven't gone out and quantified what portion of the market we think we can take over the next three to five years. I would say, as Marc cited in the script, based on some early feedback, we are very confident in our ability to have the same growth with Prosigna and have had numerous conversations with centers that are large in nature who are contemplating not just dabbling and having more active engagement to the point of effectively fully switching. We are optimistic. Our optimism is fueled by engagement with the market post the OPTIMA results.

Speaker #1: So we are optimistic and are optimism is fueled by engagement with the market post the Optima results.

Speaker #3: Thanks so much, guys. And congrats again on the corner.

[Analyst] (Jefferies): Thanks so much, guys, congrats again on the quarter.

Speaker #1: Thanks, Lauren.

Rebecca Chambers: Thanks, Lauren.

Speaker #2: Thank you. Our next question comes from Sabu Nambi with Guggenheim. Your line is open.

Operator: Thank you. Our next question comes from Subhalaxmi Nambi with Guggenheim. Your line is open.

Speaker #6: Hi, this is Ricky on for Sabu. Thanks for taking our question. So for a little more color maybe on just how you're thinking about ProSigna going forward from more of a commercial lens, in our early KOL checks oncologists have been really optimistic about adopting ProSigna and really excited about it.

[Analyst] (Guggenheim): Hi, this is Ricki on for Subbu. Thanks for taking our question. For a little more color maybe on just how you're thinking about Prosigna going forward from more of a commercial lens. In our early KOL checks, oncologists have been really optimistic about adopting Prosigna and really excited about it, but EMR integration and ordering end results through the EMR were really the one headwind that's been mentioned in terms of increasing adoption. Could you speak to your plans for that type of integration or any other commercial or logistic initiatives you're focused on to support more Prosigna adoption? Thank you.

Ricki Levitus: Hi, this is Ricki on for Subbu. Thanks for taking our question. For a little more color maybe on just how you're thinking about Prosigna going forward from more of a commercial lens. In our early KOL checks, oncologists have been really optimistic about adopting Prosigna and really excited about it, but EMR integration and ordering end results through the EMR were really the one headwind that's been mentioned in terms of increasing adoption. Could you speak to your plans for that type of integration or any other commercial or logistic initiatives you're focused on to support more Prosigna adoption? Thank you.

Speaker #6: But EMR integration and ordering and results through the EMR were really the one headwind that's been mentioned in terms of increasing adoption. Could you speak to your plans for that type of integration or any other commercial or logistic initiatives you're focused on to support more ProSigna adoption?

Speaker #6: Thank you.

Speaker #5: Yeah, thanks for the question. We can't disagree. We believe that at volume, EHR integration goes a long way. Not just to simplify the logistical burden on the practice administrators and the physicians, but also in just streamlining and even potentially automating some of the test ordering and automation into the overall workflow.

John Leite: Yeah. Thanks for the question. We can't disagree. We believe that at volume, EHR integration goes a long way. Not just to simplify the logistical burden on the practice administrators and the physicians, but also in just streamlining and even potentially automating some of the test ordering and automation into the overall workflow. Having said all that, we are heavily investing in our team here that's able to leverage both internal resources and external partners and external service providers to get us integrated with as many practices as possible. The good news here is that was already an activity that was on its way to support our Decipher and Afirma business, and we can tag-team on those efforts. Yeah, absolutely can't agree any more.

Speaker #5: Having said all that, we are heavily investing in our team here that's able to leverage both internal resources and external partners and external service providers to get us integrated with as many practices as possible.

Speaker #5: The good news here is that was already an activity that was on its way to support our Decipher and our Affirma business, and that we can tag team on those efforts.

Speaker #5: But yeah, absolutely can't agree anymore.

Speaker #2: Thank you. Our next question comes from Keith Hinton with Freedom Capital Markets. Your line is open.

Operator: Thank you. Our next question comes from Keith Hinton with Freedom Capital Markets. Your line is open.

Speaker #7: Great. Thanks. Just one quick guidance. On Decipher, can you just talk a little bit about the low-risk population? What kind of the penetration level is today for molecular diagnostics?

Keith Hinton: Great, thanks. Just one quick one on Decipher and then a question on guidance. On Decipher, can you just talk a little bit about the low-risk population, what kind of the penetration level is today for molecular diagnostics? With the guideline changes that you're hoping to have reversed in the future with additional data, where you think that that penetration rate could go over the next few years?

Speaker #7: And with the guideline changes that you're hoping to have reversed in the future with additional data kind of where you think that that penetration rate could go over the next few years?

Speaker #4: Yeah, happy to. I can talk about our penetration we think we're about 20% penetrated into this important low-risk market. And in fact, the penetration is growing every quarter, even in this quarter.

Marc Stapley: Yeah, happy to. I can talk about our penetration. We think we're about 20% penetrated into this important low-risk market. In fact, the penetration is growing every quarter. Even in this quarter, we saw a growth in the number of new customers and a growth in the number of ordering customers. It's continuing to grow at a rate that, we said single-digit, that exceeds the rate of incidence growth. For it to really kick into a new gear, we do think it will need that NCCN guideline. Between now and then, I think it's going to continue to penetrate more as it grows every quarter, hopefully every quarter and certainly every year. Then, I think guidelines put it in the same category as intermediate and now what we're seeing with high risk.

Speaker #4: We saw a growth in the number of new customers and the growth in the number of ordering customers. And so it's continuing to grow at a rate that we said single digit that exceeds the rate of incidence growth.

Speaker #4: But for it to really kick into a new gear, it will we do think it will need that NCCN guideline. So between now and then, I think it's going to continue to penetrate more.

Speaker #4: As it grows every quarter, hopefully every quarter and certainly every year. And then I think guidelines put it in the same category as intermediate and now what we're seeing with high risk.

Speaker #1: And that is, to be clear, our expectation is that we believe that we can have at least 80% penetration in a similar amount of share, if not more, on a sustainable basis on an optimized penetration.

John Leite: That is, to be clear, our expectation is that we believe that we can have at least 80% penetration and a similar amount of share, if not more, on a sustainable basis at optimized penetration. There's a huge runway, not only in the low-risk opportunity, but equally in the high and, to a lesser extent, intermediate, though there's still immense amount of white space left in intermediate. You want to move on to the Decipher question, Keith? I'm sorry, the guidance question?

Rebecca Chambers: That is, to be clear, our expectation is that we believe that we can have at least 80% penetration and a similar amount of share, if not more, on a sustainable basis at optimized penetration. There's a huge runway, not only in the low-risk opportunity, but equally in the high and, to a lesser extent, intermediate, though there's still immense amount of white space left in intermediate. You want to move on to the Decipher question, Keith? I'm sorry, the guidance question?

Speaker #1: So there's a huge runway not only in the low-risk opportunity, but equally in the high and to a lesser extent intermediate, though there's still immense amount of white space left in intermediate.

Speaker #1: Do you want to move on to the Decipher question, Keith? I'm sorry, the guidance question.

Marc Stapley: Sure, Keith.

Keith Hinton: Sure, Keith.

Speaker #4: See you, Lucy.

Operator: Thank you. Our next question comes from Jacob Dodd with Morgan Stanley. Your line is now open.

Speaker #2: Thank you. Our next question comes from Jacob Dodd with Morgan Stanley. Your line is now open.

Speaker #8: Hi, good evening. Thanks, Simon, for Callum tonight. Quickly, if I'm wrong, but I believe ProSigna launched with commercial coverage, but not with Multi-X. Could you help us understand how you're managing patient access for Medicare beneficiaries right now?

Jacob Dodd: Hi, good evening. Thanks, Aman, for Kallum tonight. Correct me if I'm wrong, I believe Prosigna launched with commercial coverage, not with MolDX. Could you help us understand how you're managing patient access for Medicare beneficiaries right now? Are you performing those tests at risk? What is your current expectation for the MolDX timeline and confidence level based on OPTIMA data? Thank you.

Jakob Dodd: Hi, good evening. Thanks, Aman, for Kallum tonight. Correct me if I'm wrong, I believe Prosigna launched with commercial coverage, not with MolDX. Could you help us understand how you're managing patient access for Medicare beneficiaries right now? Are you performing those tests at risk? What is your current expectation for the MolDX timeline and confidence level based on OPTIMA data? Thank you.

Speaker #8: Are you performing those tests at risk? And then what is your current expectation for the Multi-X timeline and confidence level based on Optima data?

Speaker #8: Thank you.

Speaker #5: Yeah, so ProSigna has already enjoyed coverage from Medicare via our on-market FDA-approved product. Our plan had been to transition away from the FDA distributed product towards a centralized LDT, so from a coverage perspective, we're covered.

John Leite: Prosigna has already enjoyed coverage from Medicare via our on-market FDA-approved product. Our plan had been to transition away from the FDA distributed product towards a centralized LDT. From a coverage perspective, we're covered. The process moving forward is to submit a tech assessment that outlines our lab validation, the analytical validation, our bridging study to the FDA-approved product and platform, and to have that reviewed and subsequently approved by Medicare. We've already been enjoying a few exchanges with MolDX. We see the path forward as fairly straightforward and see the approval of that tech assessment imminently. The last step would then be an agreement of pricing, and for that, we have multiple paths to a secure price. We've guided before to expect the low end of that pricing around $2,500.

Speaker #5: The process moving forward is to submit a tech assessment that outlines our lab validation, the analytical validation, our bridging study through the FDA-approved product and platform, and to have that reviewed and subsequently approved by Medicare.

Speaker #5: We've already been enjoying a few exchanges with Multi-X. We see the path forward as a fairly straightforward and kind of see the approval of that tech assessment imminently.

Speaker #5: The last step would then be an agreement of pricing and for that, we have multiple paths to secure price and we've guided before to expect the low end of that pricing around $2,500.

Speaker #8: Great, thanks.

Jacob Dodd: Great, thanks.

Jakob Dodd: Great, thanks.

Speaker #2: Thank you. Our next question comes from Keith Hinton with Freedom Capital Markets. Your line is open.

Operator: Thank you. Our next question comes from Keith Hinton with Freedom Capital Markets. Your line is open.

Speaker #7: Great. Thanks for taking the follow-up. Just quickly on guidance, obviously the results in the first two quarters of the year have been meaningfully above that 26% floor that you guys have given, which you maintained.

Keith Hinton: Great. Thanks for taking the follow-up. Just quickly on guidance, obviously the results in the first two quarters of the year have been meaningfully above that 26% floor that you guys have given, which you maintained. I just want to ask how much of that is the incremental investment you talked about pulling forward some of the sales force build for Prosigna and how much of it is just conservatism or however you want to think about it and if you want to just

Speaker #7: So I just want to ask sort of how much of that is the incremental investment you talked about, kind of pulling forward some of the sales force build for ProSigna and how much of it is just conservatism or however you kind of want to think about it.

Speaker #7: And if you want to just if you can give any color to the level of investment that you're pulling forward for ProSigna as well.

Keith Hinton: If you can give any color to the level of investment that you're pulling forward for Prosigna as well.

Speaker #1: Yeah, so I'll handle that last part first. So we are going from a roughly 10-person sales force exiting this year to a 15-person sales force exiting this year.

Rebecca Chambers: I'll handle that last part first. We are going from a roughly 10-person sales force exiting this year to a 15-person sales force as of this year. That's not going to be a material, that meaningful of a contribution. As Jon spoke about, obviously EMRs are part of our activity plan here, and that is something that we are investing in and we'll invest as much as we can, because that is such a high ROI endeavor. All that being said, I wouldn't call this conservatism, Keith. I would call it two things. One, we have a huge opportunity in front of us with a deep pipeline across multiple indications, across multiple portions of the care continuum that we want to invest in to drive higher revenue growth in the future, even above and beyond the relatively attractive levels we are today.

Speaker #1: So that's not going to be a material in that meaningful of a contribution. As John spoke about, obviously EMRs are part of our activity plan here, and that is something that we are investing in and will invest as much as we can, because that is such a high ROI endeavor.

Speaker #1: That being all that being said, I wouldn't call this conservatism, Keith. I would call it two things. One, we have a huge opportunity in front of us with a deep, deep pipeline across multiple indications, across multiple portions of the care continuum that we want to invest in to drive higher revenue growth in the future, even above and beyond the relatively attractive levels we are today.

Speaker #1: So I think we have great opportunity in front of us across MRD, Decipher or Pharma, the rest of the urology space, and obviously ProSigna.

Rebecca Chambers: I think we have great opportunity in front of us across MRD, Decipher, Afirma, the rest of the urology space, and obviously Prosigna. We're investing heavily in there. I would say the other thing on our guide is we don't necessarily guide on a go-forward basis with PPCs, and PPCs have been a significant contributor to the outperformance year to date. That is just something to take into account. We don't guide that in revenue, and we don't guide it in profitability. The last thing I would say on gross margin, we've had amazing gross margin performance, as we do see significant Prosigna volume in the back half of the year, given our revenue recognition policies as well as just the lack of reimbursement from the get-go. That is going to be a slight headwind.

Speaker #1: And so we're investing heavily in there. I would say the other thing on our guide is we don't necessarily guide on a go forward basis with PPCs and PPCs have been a significant contributor to the outperformance year to date.

Speaker #1: And so that is just something to take into account. We don't guide that in revenue and we don't guide it in profitability. And then I would the last thing I would say on gross margin, we've had amazing gross margin performance as we do see significant ProSigna volume in the back half of the year, given our revenue recognition policies.

Speaker #1: As well as just the lack of reimbursement from the get-go that is going to be a slight headwind. And that would be something to take into account if you want to call that ProSigna investment, feel free.

Rebecca Chambers: That would be something to take into account. If you want to call that Prosigna investment, feel free. Those are really the contributing factors.

Speaker #1: But those are really the contributing factors.

Speaker #7: Great. Thank you very much.

Keith Hinton: Great. Thank you very much.

Speaker #2: Thank you. Our next question comes from Puneet Suda with Leering Partners. Your line is open.

Operator: Thank you. Our next question comes from Puneet Souda with Leerink Partners, your line is open.

Speaker #5: Yeah, hi guys. Thanks for the questions here. So just on Decipher, just wondering Decipher low risk, do you believe there was any impact from the ACA disenrollment on the volumes or was this all largely comp issues that you saw in the quarter?

Puneet Souda: Yeah. Hi, guys. Thanks for the questions here. Just on Decipher. Just wondering, Decipher low risk, do you believe there was any impact from the ACA disenrollment on the volumes? Or was this all largely comp issues that you saw in the quarter? How should we think about overall growth for Decipher? You pointed out a number of drivers that helped in 2024 NCCN, and it's been a very strong product, but how should we think about sort of the stable growth trajectory? What is that number for Decipher? I'm wondering if you can provide anything for 2027 color, if you would like to. Thank you.

Speaker #5: And how should we think about overall growth for Decipher? You pointed out a number of drivers that helped in 2024, NCCN and it's been a very strong product.

Speaker #5: But how should we think about sort of the stable growth trajectory? What is that number for Decipher and wondering if you can provide anything for 2027 color if you would like to.

Speaker #5: Thank you.

Speaker #7: Yeah. Yeah. Thanks, Puneet. It's a combination of, I think, the comp on what we're seeing in the low risk, which is, as I mentioned, it's kind of more of a single-digit growth and not a double-digit growth right now based on what we're seeing.

Marc Stapley: Yeah. Thanks, Puneet. It's a combination of, I think, the comp from what we're seeing in the low risk, which is, as I mentioned, is kind of more of a single-digit grower than not a double-digit grower right now based on what we're seeing. Still growing, but not at the same level as the rest of the Decipher risk categories. Obviously, given those guidelines for NCCN. We expect that to continue, and that's why we adjusted our outlook by about 1,000 tests. We also have very strong performance on the revenue line for Decipher as well. We've maintained Decipher around 20% revenue growth for the year, which is very healthy.

Speaker #7: And so still growing, but not at the same level as the rest of the Decipher risk categories. Obviously, given those guidelines, for NCCN. And so we expect that to continue and that's why we adjusted our outlook by about 1,000 tests.

Speaker #7: We also have very strong performance on the revenue line for Decipher as well. And so we've maintained Decipher around 20% revenue growth for the year, which is very healthy.

Marc Stapley: We are extremely excited about the high risk and intermediate that are both growing very nicely given our competitive advantages in NCCN guidelines there and the raft of evidence that we have supporting Decipher's use for clinical decisions in those two contexts. When I say high risk, of course, that includes BCR and metastatic, which is a relatively new area for us as well. When you put it all together, those parts are growing nicely. Decipher, to your question on the go-forward trajectory, Decipher is on this very straight line. I think I've mentioned it before. When you look at it's got a very high R squared, and what's happening there, it's highly predictable in that regard. I don't see any reason why that kind of trend line should change in the next couple of years.

Speaker #7: We are extremely excited about the high risk and intermediate that are both growing very, very nicely, given our competitive advantages in NCCN guidelines there.

Speaker #7: And the raft of evidence that we have supporting Decipher's use for clinical decisions in those two contexts. And when I say high risk, of course, that includes PCR and metastatic, which is a relatively new area for us as well.

Speaker #7: So when you put it all together, those parts are growing nicely. Decipher, to your question on the collective go forward trajectory, Decipher is on this very straight line.

Speaker #7: I think I mentioned it before. The when you look at it, it's got a very high R squared and what's happening there, it's highly predictable in that regard.

Speaker #7: And I don't see any reason why that kind of trend line should change in the next couple of years. It seems to be around 20,000 tests a year plus or minus 1,000 or so.

Marc Stapley: It seems to be around 20,000 tests a year, plus or minus 1,000 or so. That's the variability that I would put on that. Like I said, I don't see much coming that would change that other than in that time frame we talked about. Hopefully, we get the evidence to get low risk to be in a very similar category.

Speaker #7: And that's the that's the variability that I would put on that. And like I said, I don't see much coming that would change that other than in that timeframe we talked about, hopefully we get the evidence to get low risk to be in a very similar category.

Speaker #1: And maybe just one thing while I have the opportunity to add on the Affirma, number for next year, I just just would like everyone to remember that we had the benefit of the NRR in our '26 results and our '26 guide.

Rebecca Chambers: Maybe just one thing while I have the opportunity to add on the Afirma number for next year. I just would like everyone to remember that we had the benefit of the NRR in our 2026 results and our 2026 guide. That will create a harder comp next year on Afirma. Then also, Afirma PPCs have been quite outstanding year to date. Just please take those two things into account when you're looking at your 2027 numbers for Afirma.

Speaker #1: That will create a harder comp next year on Affirma. And then also Affirma PPCs have been quite outstanding year to date. So just those two, please take those two things into account when you're looking at your '27 numbers for Affirma.

Puneet Souda: Got it. That's helpful. Then when we think about Prosigna, there's a premenopausal node-positive position that could benefit patients that could benefit. Could you elaborate sort of what the discussions have been so far? How is the traction in the market just since the launch? How should we think about any volume numbers this year or next year for Prosigna?

Speaker #5: Got it. That's helpful. And then when we think about ProSigna, there's a premenopausal node positive position that could benefit patients that could benefit. Could you elaborate sort of what's the discussions have been so far?

Speaker #5: How has the traction in the market just since the launch? How should we think about any volume numbers this year or next year for ProSigna?

John Leite: Well, from a market response, I'd say the market responded very favorably to the release of the OPTIMA trial data. Obviously, premenopausal and high node burden in general is what caused probably the larger splash effect because it is so game-changing. Nevertheless. As I've been saying, we believe that our overall opportunity covers the gamut of the HER2-negative, ER-positive population. Nevertheless, that's why I imagine, Puneet, those physicians are going to start and then expand from there. If it ends up being a land and expand strategy with some physicians, and quite a few of them, I believe that will be the case. Others we've had discussions with are ready to pull the trigger wholesale, because it's just easier to deal with one provider. So the conversation turns very quickly from clinical to logistical. With regards to numbers, we're not quite there to guide with targets.

Speaker #3: Nevertheless, as I've been saying, we believe that our overall opportunity covers the gamut of the HER2 negative positive population. But nevertheless, that's why I imagine those positions are going to start and then expand from there if it ends up land and expand strategy with some positions and quite a few of them I believe that that will be the case.

Speaker #3: Others we've had discussions with are ready to pull the trigger wholesale because it's just easier to deal with one provider. And so the conversation turns very quickly from clinical to logistical.

Speaker #3: With regards to numbers, we're not quite there to guide with target. We're going to allow ourselves the opportunity to collect data over the next coming months.

John Leite: We're going to allow ourselves the opportunity to collect data over the next coming months before we can guide with some accuracy.

Speaker #3: Before we can guide with some accuracy.

Speaker #5: And Puneet, just to remind everybody, I mean, there are 100 I mentioned there are hundreds of publications of support ProSigna's use in node negative population.

Marc Stapley: Puneet, just to remind everybody, I mentioned that there are hundreds of publications that support Prosigna's use in the node-negative population as well. To John's point, I think it's both the ease and also the level of evidence and the robustness behind Prosigna and the PAM50 signature that is also appealing.

Speaker #5: As well. So to John's point, I mean, I think it's both the ease and also the level of evidence. And the robustness behind ProSigna in the PAM50 signature that is also appealing.

Speaker #5: Got it. Okay. And just last clarification, I might have missed this, but the Decipher growth was more than 20% than it's now going to be at 20%.

Puneet Souda: Got it. Okay. Just last clarification, I might have missed this, the Decipher growth was more than 20%, and it's now going to be at 20% held constant. Just wanted to clarify on that point for this year guide.

Speaker #5: It held constant just wanted to clarify on that point for this year guide.

Speaker #7: Yeah, to be clear, that's the revenue. The revenue guide is at 20%. And we gave very specific numbers for Q3 and Q4 for volume.

Marc Stapley: Yeah, to be clear, that's the revenue. The revenue guide is at 20%, and we gave very specific numbers for Q3 and Q4 for volume. Of course, don't forget, there's always this quarterly volume variability that can come from the timing of receiving orders and tissue coming in the door and results being reported out. You should always expect that level of a day's worth of variability, give or take. Remember, given how much we've grown now in Decipher, a day's volume is 500 tests or so. It's very significant running through our lab every single day. You should expect a normal level of fluctuation on the quarterly numbers. We always say focus on the year. Overall, we're guiding roughly 20% growth for Decipher revenue growth for the year.

Speaker #7: Now, of course, don't forget there's always this quarterly volume variability that can come from the timing of receiving orders and tissue coming in the door and results being reported out.

Speaker #7: So you should always expect that level of a day's worth of variability, give or take. I mean, remember, given how much we've grown now in Decipher, a day's volume is 500 tests or so.

Speaker #7: And so it's very significant running through our lab every single day. And so you should expect the normal level of fluctuation on the quarterly numbers.

Speaker #7: We always say focus on the year. But overall, we're guiding roughly 20% growth for Decipher revenue growth for the year.

Speaker #1: And Puneet, the ASP gains that we've gotten are making up for the 1,000 tests guide.

Rebecca Chambers: Puneet, the ASP gains that we've gotten are making up for the 1,000 test delta in the volume guide.

Speaker #5: Got it. Okay.

Puneet Souda: Got it. Okay. Thank you.

Speaker #1: But there are prior periods in the back half of last year as a comp to take into account on pricing just we can go through that later today if you want.

Rebecca Chambers: There are prior periods in the H2 of last year as a comp to take into account on pricing. We can go through that later today if you want.

Speaker #5: I see. Okay. All right. Helpful. All right. Thanks.

Puneet Souda: I see. Okay. All right. Helpful. All right. Thanks.

Speaker #7: Thanks.

Marc Stapley: Thanks, Puneet.

Speaker #2: Thank you. Our next question comes from Mason Carico with Stevens. Your line is open.

Operator: Thank you. Our next question comes from Mason Carrico with Stephens. Your line is open.

Speaker #8: Hey guys. Jumping between a few tonight. So sorry if this has been asked. I'll just keep it to one here. Could you update us on the true MRD pipeline?

Mason Carrico: Hey, guys. Sorry if this has been asked. I'll just keep it to one here. Could you update us on the TrueMRD pipeline? When should we expect to see the next data readout? When will we learn more about the next submission to MolDX or indication that you'll be targeting there?

Speaker #8: When should we expect to see the next data readout? And when will we learn more about the next submission of MOLDX or indication that you'll be targeting there?

Speaker #7: Yeah. Thanks, Mason. No, that hasn't been asked. Focusing on true MRD, well, obviously, we're very happy with the launch of our first test in muscle invasive bladder cancer.

Marc Stapley: Yeah. Thanks, Mason. No, that hasn't been asked. Focusing on TrueMRD, obviously we're very happy with the launch of our first test in muscle invasive bladder cancer. We've always talked about that's kind of our landmark test, if you like, that helps us pilot our MRD approach in a relatively small, but very important indication. That's where we're focused right now. Meantime, we do have our development teams and our clinical teams working on the next levels of evidence development and the next assays and so on. We'll talk more about that when we're ready to launch those tests. We had a review just this week on the various studies that are going on and when they're expected to read out in different indications, and it's good. There's a lot of things happening, and hopefully, we'll add to that over the next few years as well.

Speaker #7: We've always talked about that's kind of our landmark test, if you like, that helps us pilot our MRD approach in a relatively small, but very important indication.

Speaker #7: That's where we're focused right now. Meantime, we do have our development teams and our clinical teams working on the next levels of evidence development and the next assays.

Speaker #7: And so on. So we'll talk more about that when we're ready to launch those tests. We had a review just this week on the various studies that are going on and when they're expected to read out in different indications.

Speaker #7: And it's good. There's a lot. There's a lot of things happening. And hopefully, we'll add to that over the next few years as well.

Speaker #7: So excited for the bladder test to prove the proof point here and then expand on that.

Marc Stapley: Excited for the bladder test to prove the proof point here and then expand on that.

Speaker #8: Got it. Thank you.

Mason Carrico: Got it. Thank you.

Speaker #7: Thank you.

Marc Stapley: Thank you.

Speaker #2: Thank you. Our next question comes from Kyle Mixon with Cannock Originuity. Your line is open.

Operator: Thank you. Our next question comes from Kyle Mikson with Canaccord Genuity. Your line is open.

Speaker #6: Hi, this is Alison Kenneth for Kyle Mixon. Thank you for taking our questions. Apologies if any of these are repeat. I forgot a few different calls today.

Alex Du Case: Hi, this is Alex Du Case. I am on for Kyle Mikson. Thank you for taking our questions. Apologies if any of these are repeats. I have been on a few different calls today. ProSigna NGS became available for order 8 June, and it is covered by a significant number of commercial payers in the past. Can you just comment on early test adoption? Do you believe that the OPTIMA study results could be the key to guideline inclusion or either future or true test volume inflection? Thank you.

Alex Vukasin: Hi, this is Alex Du Case. I am on for Kyle Mikson. Thank you for taking our questions. Apologies if any of these are repeats. I have been on a few different calls today. ProSigna NGS became available for order 8 June, and it is covered by a significant number of commercial payers in the past. Can you just comment on early test adoption? Do you believe that the OPTIMA study results could be the key to guideline inclusion or either future or true test volume inflection? Thank you.

Speaker #6: But so ProSigna NGS became available for order June 8th and it's covered by a significant number of commercial payers in the past. Can you just comment on early test adoption?

Speaker #6: Do you believe that the optimist study results could be the key to guideline inclusion or either future or true test volume inflection? Thank you.

Speaker #7: Yeah. So I'll take that one at a time. So with regards to adoption, yes, we're very pleased with both the reaction that we've gotten from physicians I would say even unexpectedly from patients who've reached out to us directly asking how they can get the test and having seen now the first few results going back, it's just been very emotional and very gratifying to be able to start to help this important pool of patients.

John Leite: Yeah. I will take that one at a time. With regards to adoption, yes, we are very pleased with both the reaction that we have gotten from physicians, I would say even unexpectedly from patients who have reached out to us directly asking how they can get the test. Having seen now the first few results going back, it is just been very emotional and very gratifying to be able to start to help this important pool of patients. I think it absolutely signifies that we will see healthy adoption. We are very happy with the early KPIs, like I said, with the response as well. There is always a bit of a lag in terms of setting up accounts in our logistical systems and ensuring that we are clear to their procurement offices, but we are happy with where we are tracking this soon after the launch.

Speaker #7: I think it absolutely signifies that we will see healthy adoption. We're very happy with the early KPIs. Like I said, with the responses as well.

Speaker #7: There's always a bit of a lag in terms of setting up accounts and our logistical systems and ensuring that we are clear that there are procurement offices but we're happy with where we're tracking this soon after the launch.

Speaker #7: As it relates to the optimum trial, yes, we believe that it is generally acknowledged as level 1A evidence. And as such, should make its way to guidelines.

John Leite: As it relates to the OPTIMA trial, yes, we believe that it is generally acknowledged as level 1A evidence, as such, should make its way to guidelines. What stands in our way between now and then is the publication. As we have communicated in the past, that is out of our hands. This is an independent study run by a group of PIs. We will keep you posted as we make progress as the guidelines review the data.

Speaker #7: What stands in our way between now and then is a publication. As we've communicated in the past, that's out of our hands. This is an independent study run by a group of PIs.

Speaker #7: And we'll keep you posted as we make progress and as the guidelines review the data.

Speaker #2: Thank you. As a reminder, to ask a question, please press star 11 on your telephone. Again, that is star 11 to ask a question.

Operator: Thank you. As a reminder, to ask a question, please press star one one on your telephone. Again, that is star one one to ask a question. Our next question comes from David Westenberg with Piper Sandler. Your line is open.

Speaker #2: Our next question comes from David Westenberg with Piper Sandler. Your line is open.

Speaker #9: Hey guys, this is Bron on for David Westenberg. I've been jumping around as well. So I'll keep it brief and apologies if this has been asked.

[Analyst] (Piper Sandler): Hey, guys. This is Bron on for David Westenberg. I've been jumping around as well, so I'll keep it brief, and apologies if this has been asked. Maybe sticking with the pipeline, can you give us an update on the NIGHTINGALE study? I think previously you mentioned roughly 90% enrolled. When could we expect to hear maybe intermediate data? Yeah, that'd be appreciated. Thank you.

Speaker #9: But maybe sticking with the pipeline, can you give us an update on the Nightingale study? I think previously you mentioned roughly 90% enrolled. I guess can you when could we expect to hear maybe intermediate data?

Speaker #9: Yeah, that'd be appreciated. Thank you.

Speaker #7: Yeah, happy to. And no, it hasn't been asked. The Nightingale study, just to remind everybody, is our very extensive study that we have done on perceptive nasal swab test.

Marc Stapley: Yeah, happy to. No, it hasn't been asked. The NIGHTINGALE study, just to remind everybody, is our very extensive study that we have done on the Percepta Nasal Swab test, and it was completed in enrollment last August, I believe it was. We're about a year in now, almost a year into having those first patient follow-ups. It's going to be a while before that fully reads out. We're treating that as one of our longer-term growth drivers. That's where we are on NIGHTINGALE. Looking forward to seeing how that reads out once we've got all the patients followed for at least one year, if not potentially two.

Speaker #7: And it was completed in enrollment last August, I believe it was. So we're about a year in now. Almost a year into having those first patient follow-ups.

Speaker #7: And it's going to be a while before that fully reads out. So we're treating that as one of our longer-term growth drivers. And so that's where we are on Nightingale looking forward to seeing how that reads out once we've got all the patients followed for at least one year if not potentially two.

Speaker #2: Thank you. Our next question comes from Joseph Conway with Needham and Company. Your line is open.

Operator: Thank you. Our next question comes from Joseph Conway with Needham & Company. Your line is open.

Speaker #7: Hey everyone. Thanks for taking our questions. Maybe one undeciphered to start out with. Really strong quarter. Just wondering maybe how much of the growth in the quarter, if you could dissect it, is maybe from expansion into a new use cases or newer use cases?

Joseph Conway: Hey, everyone. Thanks for taking our questions. Maybe one on Decipher to start out with. Really strong quarter. Just wondering maybe how much of the growth in the quarter, if you could dissect it, is maybe from expansion into new use cases or newer use cases, whether it be treatment intensification or the metastatic setting versus maybe just higher overall penetration in the use cases that you guys have had for the last handful of years. Maybe just in the same vein, looking forward, which of those buckets do you think will be more repeatable over the next couple of years, whether it be new indications or continued market penetration and existing?

Speaker #7: Whether it be like treatment intensification or the metastatic setting versus maybe just higher overall penetration in the use cases that you guys have had for the last handful of years.

Speaker #7: And then maybe just in the same vein looking forward, what should those buckets do you think will be more repeatable over the next couple of years?

Speaker #7: Whether it be new indications or continued market penetration and existing. Yeah, I think the best way to actually think about it is the risk categories that we've been discussing deciphering.

Marc Stapley: Yeah, I think the best way to actually think about it is the risk categories that we've been discussing Decipher in. Within each of those risk categories, more evidence comes out that adds either more prognostic or predictive claims. A good example of that is in high risk and metastatic, where you've seen evidence come out at ESMO for STAMPEDE and then at ASCO for ENZAMET, which keep adding these predictive claims and is one of the factors that is helping to grow the high risk and metastatic category, which is one of the higher growth driver categories within Decipher. Intermediate continues to be an absolute seaward growth in terms of adding new. We're constantly adding new customers who have not ordered Decipher before.

Speaker #7: And within each of those risk categories, more evidence comes out that adds either more prognostic or predictive claims. And a good example of that is in high risk.

Speaker #7: And metastatic where you've seen evidence come out in at ESMO for stampede and then at ASCO for enzymate which keep adding these predictive claims.

Speaker #7: And it's one of the factors that is helping to grow the high risk and metastatic category which is one of the higher growth driver categories within deciphering.

Speaker #7: And intermediate continues to be an absolute stalwart of growth in terms of adding new with constantly adding new customers who have not ordered decipher before.

Marc Stapley: We're seeing a nice uptick in the ordering rate per customer, which means they're expanding it across their patient population, even within an intermediate risk category, for example. Other than low risk, which again, just to remind people, low risk is growing in terms of we're adding new customers for low risk, but it's not growing at the double-digit rate. It's more of a single-digit rate now. Yeah, I think if you think about it like that, the growth in the next couple of years is going to come from high risk and intermediate, then the growth after that is going to come from low risk when we have the active surveillance evidence supporting that guidance.

Speaker #7: We're seeing a nice uptick in the ordering rate per customer which means they're expanding it across their patient population. Even within an intermediate risk category, for example.

Speaker #7: And so other than low risk, which again, just to remind people, low risk is growing in terms of we're adding new customers for low risk.

Speaker #7: But it's not growing at the double-digit rate. It's more at the single-digit rate now. So yeah, I think if you think about it like that, it's the growth in the next couple of years is going to come from high risk and intermediate.

Speaker #7: And then the growth after that is going to come from low risk when we have the active surveillance evidence supporting that guidance.

Rebecca Chambers: The other thing outside of the prostate portion of the urology market for Decipher, obviously, we're quite excited about the opportunity for bladder. It's just starting to get going, but the data evidence generation engine has been fully at work here now for a couple of years, so we are incrementally excited about the bladder opportunity in the back half of the decade as well.

Speaker #7: Back half. Okay, great. And then just one more. I know you guys get this question a decent amount, but just in terms of share buybacks or M&A, obviously, there's a you have a couple of launches and pipeline projects that are prioritizing a lot of investment now.

Joseph Conway: Okay, great. Just one more. I know you guys get this question a decent amount, but just in terms of share buybacks or M&A, obviously you have a couple of launches and pipeline projects that are prioritizing a lot of investment now. Is there maybe a specific cash balance or profitability metric where you guys start thinking about buybacks more, or maybe it's more about waiting until the launches and the pipeline is more in the rear view? I'm just wondering how you guys are thinking about that, if it's more of a dollar metric or more of a milestone kind of thing.

Speaker #7: But is there maybe a specific cash balance or profitability metric where you guys start thinking about buybacks more or maybe it's more about waiting until the launches and the pipeline is more in the rearview?

Speaker #7: I'm just wondering how you guys are thinking about that. If it's more of a dollar metric or more of a milestone kind of thing.

Speaker #7: Yeah, no, not really. I wouldn't say it was that scientific. It's really we look at the capital deployment in really three categories. One is continued investment in our business.

Marc Stapley: Yeah. No, not really. I wouldn't say it was that scientific. It's really, we look at the capital deployment in really three categories. One is continued investment in our business, and Rebecca ran through earlier some of the things that we're doing there to really help drive the launch of these two new products. Our pipeline of additional new products and innovations, and also the core growth in Decipher and Afirma. That's priority number one, is invest in the business and continue to make it grow as we have done year after year after year. The second is, you've mentioned it, M&A. We've done a few acquisitions as a company, and we do look at the market and we look at a lot of different things, and we're very open to the right assets being a part of Veracyte at the right time.

Speaker #7: And Rebecca ran through earlier some of the things that we're doing there. To really help drive the launch of these two new products. Our pipeline of additional new products and innovations.

Speaker #7: And also the core growth in deciphering a firma. So that's priority number one is invest in the business and continue to make it grow as we have done year after year after year.

Speaker #7: The second is you've mentioned it, but M&A we've done a few acquisitions as a company. And we do look at the market and we look at a lot of different things.

Speaker #7: And we're very open to the right assets being a part of VERACYTE at the right time. And then the third category would be returning to investors in the way that you've described.

Marc Stapley: The third category would be returning to investors in the way that you've described. That to me, at this point, when you think of all these other two categories and the things we got ahead of us and the opportunities for us to deploy capital, is not top of mind, but we regularly look at that and discuss it. You can rest assured it's certainly on the docket. It's just we've got plenty of things going on right now.

Speaker #7: And that to me at this point, when you think of all these other two categories and the things we've got ahead of us and the opportunities to deploy capital, is not top of mind, but we regularly look at that and discuss it.

Speaker #7: So you can rest assured it's certainly on the docket. It's just we've got plenty of things going on right now. Okay. Thanks everyone for taking our questions and congrats on the very strong quarter.

Joseph Conway: Okay. Thanks everyone for taking our questions and congrats on a very strong quarter.

Speaker #7: Thank you.

Marc Stapley: Thanks.

Rebecca Chambers: Thank you. Have a great afternoon.

Speaker #3: Thank you. Have a great afternoon.

Operator: Thank you. This concludes the question and answer session and today's conference call. Thank you for participating. You may now disconnect.

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