Veracyte cuts 2026 revenue outlook to $590–593 million despite earnings beat
Key Facts
Veracyte reported results on November 4 for the third quarter ended September 30, posting total revenue of $151.8 million, up 15% year over year. Testing revenue rose by the same percentage to $146.4 million, while adjusted earnings per share topped the Zacks estimate. Adjusted earnings were $0.51 per share, compared with an estimate of $0.44. Revenue also exceeded the Zacks estimate of $147.3 million. But the company narrowed its annual outlook, putting the path of future growth at the center of the results.
The company cut its 2026 total revenue outlook to a range of $590 million to $593 million, compared with its previous range of $590 million to $596 million. The prior outlook range had been raised in the second-quarter update to $590–596 million, from $582–592 million. Veracyte also cut its testing revenue outlook to $571–573 million, from $576–582 million. Management maintained its outlook for an adjusted EBITDA margin of more than 26% for 2026. The company said the cut to testing revenue expectations, alongside a limited contribution from recently launched tests, drove the annual outlook revision.
Testing performance reflected a split between the two main products: Chief Executive Mark Stapley said Afirma exceeded expectations, while Decipher Prostate volume came in below them. Decipher Prostate revenue was about $92.3 million, up 12% year over year, while Afirma revenue reached about $51.5 million, up 19%. The company recorded about 29,900 Decipher Prostate tests and about 19,100 Afirma tests, with volume for each growing 12% year over year. Total test volume was 52,744, up 15%, while diagnostic test volume rose to 49,498, up 13%. Stapley said, "Afirma outperformed, while Decipher Prostate volume came in below our expectations."
Net income under generally accepted accounting principles was $31.5 million, and diluted earnings per share reached $0.38. Adjusted EBITDA was $41.2 million, equal to 27.2% of revenue. Gross margin rose to 71% from 69% in the corresponding quarter of 2025, while adjusted gross margin increased to 74% from 73%. Operating expenses, meanwhile, rose to $90.5 million from $68.3 million a year earlier. Adjusted operating expenses also increased 24% to $72.9 million, as the company continued to develop its products and commercial activities.
On the product front, product revenue rose 40% to $4.6 million, compared with $3.3 million, supported by adoption of Prosigna IVD following the release of results from the Phase III OPTIMA trial at the ASCO conference. The board authorized a share repurchase program of up to $100 million, which will expire after 12 months. The program does not require the company to buy a specific number of shares. At the same time, management expects test volume to grow about 10% in 2027, with revenue growth in the mid-single digits and an adjusted EBITDA margin of 22%. Zacks said the company plans to increase its urology sales team by 30% in 2027, while continuing to develop breast and bladder tests.
Management expects, according to Zacks, incremental annual growth in Decipher test volume of between 12,000 and 15,000 tests in 2027, using the low end for planning. The outlook follows 19% year-over-year growth in fourth-quarter 2025 revenue to $140.6 million, compared with 15% revenue growth in the third quarter of 2026. In premarket trading on November 5, the stock fell 31% to $36.25 after the results and weaker guidance. EL7 data showed the stock closed at $24 on November 5, after closing at $52.52 on November 4. These moves put the annual outlook revision and Decipher performance among the developments investors tracked most closely after the results.