Veracyte Inc ((VCYT)) has held its Q4 earnings call. Read on for the main highlights of the call.
In the recent earnings call, Veracyte Inc. showcased a positive sentiment with notable achievements in revenue growth and market penetration, particularly through the Decipher test. Despite these successes, the company faces challenges, including a decline in product revenue and potential operational changes in its French subsidiary that could affect future performance and product availability.
Record Year for Veracyte
2024 marked a record year for Veracyte, with Q4 revenue reaching $119 million, a 21% increase year-over-year. The full-year total revenue was an impressive $446 million, reflecting a robust growth of 23% compared to the previous year.
Testing Revenue Growth
Testing revenue, which constitutes nearly 95% of Veracyte’s business, experienced a significant growth of 28% year-over-year. The fourth quarter alone saw a 24% increase over the prior year, underscoring the company’s strong market position.
Decipher Test Performance
The Decipher test was a standout performer, delivering over 80,000 tests in 2024, marking a volume growth of 36%. The fourth quarter alone saw a 45% year-over-year increase, setting a new record with more than 22,400 tests.
Adjusted EBITDA Margin
Veracyte reported a full-year adjusted EBITDA margin of 20.6%, generating over $70 million in cash, highlighting the company’s efficient financial management and profitability.
Decline in Product Revenue
Product revenue faced a decline, totaling $3 million, down 18% year-over-year. This decrease is attributed to ongoing supply and manufacturing challenges that the company is addressing.
Challenges with French Subsidiary
Veracyte is contemplating ceasing funding for its French subsidiary, Veracyte SAS, due to declines in biopharma and manufacturing challenges. This could lead to bankruptcy proceedings, impacting the company’s operations in France.
Impact on Prosigna Manufacturing
The potential changes in the French operations could affect the manufacturing and supply of the Prosigna nCounter, contingent on finding a buyer for this segment of the business.
Forward-Looking Guidance
Looking ahead, Veracyte provided a robust guidance for 2025, anticipating testing revenue growth between 12% to 15% year-over-year, reaching $470 million to $480 million. The company expects an adjusted EBITDA margin improvement of approximately 100 basis points. Strategic initiatives, including the expansion of Decipher into metastatic populations and international expansion, are expected to drive growth.
In summary, Veracyte’s earnings call reflected a positive outlook with strong revenue growth and strategic initiatives poised to drive future success. Despite challenges such as declining product revenue and potential operational shifts in France, the company remains optimistic about its growth trajectory and financial performance.