8-K
Veracyte, Inc. (VCYT)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 6, 2024
VERACYTE, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-36156 | 20-5455398 | |||
|---|---|---|---|---|---|
| (State or other jurisdiction of<br><br>incorporation) | Commission File Number | (IRS Employer Identification<br><br>No.) | 6000 Shoreline Court, Suite 300, South San Francisco, California | 94080 | |
| --- | --- | ||||
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (650) 243-6300
N/A
(Former name or former address, if changed since last report.)
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | |
|---|---|
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.001 per share | VCYT | The Nasdaq Stock Market LLC |
| Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934. | ||
| --- | ||
| Emerging growth company ☐ | ||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ |
Item 2.02. Results of Operations and Financial Condition.
On August 6, 2024, Veracyte, Inc. issued a press release announcing its financial results for the quarter ended June 30, 2024. The full text of the press release is furnished as Exhibit 99.1 to this report.
The information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press release issued by Veracyte, Inc. datedAugust 6, 2024. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: | August 6, 2024 | ||
|---|---|---|---|
| VERACYTE, INC. | |||
| By: | /s/ Rebecca Chambers | ||
| Name: | Rebecca Chambers | ||
| Title: | Chief Financial Officer | ||
| Principal Financial Officer |
Document
Exhibit 99.1
Veracyte Announces Second Quarter 2024 Financial Results
Grew total revenue to $114.4 million, an increase of 27%
Grew testing revenue by 31%
Conference call and webcast today at 4:30 p.m. ET
SOUTH SAN FRANCISCO, Calif., August 6, 2024 --- Veracyte, Inc. (Nasdaq: VCYT) today announced financial results for the second quarter ended June 30, 2024.
“Our exceptional second quarter results are a testament to the strength and robustness of Decipher and Afirma,” said Marc Stapley, Veracyte’s chief executive officer. “With both tests clearly gaining share in their respective markets and plenty of headroom for durable future expansion, our confidence in their long-term prospects continues to grow. Meanwhile, our positive cash generation and class-leading profitability profile are fueling a portfolio of tests that are poised to drive meaningful advances in precision medicine.”
Key Business Highlights
•Increased second quarter total revenue by 27%, to $114.4 million, compared to the second quarter of 2023.
•Grew total test volume to 39,023, an increase of 23% compared to the second quarter of 2023.
•Increased second quarter net income to $5.7 million and delivered adjusted EBITDA of $24.0 million, or 21% of revenue.
•Achieved record Decipher Prostate test volume of close to 19,900 tests, driven by recently updated NCCN* prostate cancer guidelines, in which the Decipher Prostate test received the highest-level rating among gene expression tests.
•Delivered record Afirma test volume of approximately 15,700 and received Medicare coverage for Afirma testing of patients with thyroid nodules classified as “Bethesda V,” giving more patients annually access to the test.
•Reinforced Veracyte’s commitment to evidence expansion with three published Decipher Prostate test studies, including a real-world, population-based analysis of Decipher data linked to the National Cancer Institute’s SEER database demonstrating the test’s clinical utility and underscoring the power of the Veracyte Diagnostics Platform.
•Generated $26.7 million of cash during the second quarter to end the quarter with $235.9 million of cash and cash equivalents.
* National Comprehensive Cancer Network. NCCN makes no warranties of any kind whatsoever regarding their content, use or application and disclaims any responsibility for their application or use in any way.
A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables included in this press release. An explanation of these measures is also included below under the heading "Note Regarding Use of Non-GAAP Financial Measures."
Second Quarter 2024 Financial Results
Total revenue for the second quarter of 2024 was $114.4 million, an increase of 27% compared to $90.3 million reported in the second quarter of 2023. Testing revenue was $107.0 million, an increase of 31% compared to $81.7
million in the second quarter of 2023, driven by the strong performance of our Decipher Prostate and Afirma tests. Product revenue was $3.9 million, a decrease of 3% compared to $4.0 million in the second quarter of 2023. Biopharmaceutical and other revenue was $3.6 million, a decrease of 22% compared to $4.6 million in the second quarter of 2023.
Total gross margin for the second quarter of 2024 was 68%, compared to 62% in the second quarter of 2023. Non-GAAP gross margin, which excludes the amortization of acquired intangible assets, stock-based compensation, other acquisition related expenses, and certain other adjustments was 71%, compared to 68% in the second quarter of 2023.
Operating expenses were $73.3 million for the second quarter of 2024. Non-GAAP operating expenses, which excludes amortization of acquired intangible assets, stock-based compensation, other acquisition related expenses, and other restructuring costs, grew 14% to $59.0 million compared to $51.7 million in the second quarter of 2023.
Net income for the second quarter of 2024 was $5.7 million, an improvement of 168% compared to the second quarter of 2023. Basic and diluted net earnings per common share was $0.07, an improvement of $0.19 compared to the second quarter of 2023. Non-GAAP diluted net earnings per common share was $0.30, an improvement of $0.18 compared to the second quarter of 2023. Net cash provided by operating activities in the first six months of 2024 was $20.6 million, an improvement of $6.1 million compared to the same period in 2023.
Adjusted EBITDA for the second quarter of 2024 was $24.0 million, an improvement of 118% compared to the second quarter of 2023, representing 21% of revenue compared to 12% of revenue respectively.
A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables included in this press release. An explanation of these measures is also included below under the heading "Note Regarding Use of Non-GAAP Financial Measures."
2024 Financial Outlook
The company is raising full-year 2024 total revenue guidance to $432 million to $438 million, representing year-over-year growth of 20% to 21% and testing revenue growth of approximately 25%. This guidance range represents an increase compared to prior guidance of $402 million to $410 million. In addition, the company now expects cash, cash equivalents and short-term investments at the end of the year to be $260 million to $270 million compared to prior guidance of $236 million to $240 million.
Conference Call and Webcast Details
Veracyte will host a conference call and webcast today at 4:30 p.m. Eastern Time to discuss the company's financial results and provide a general business update. The conference call will be webcast live from the company’s website and will be available via the following link: https://edge.media-server.com/mmc/p/p5tuszv4. The webcast should be accessed 10 minutes prior to the conference call start time. A replay of the webcast will be available for one year following the conclusion of the live broadcast and will be accessible on the company’s website at https://investor.veracyte.com/events-presentations.
The conference call dial-in can be accessed by registering at the following link: https://register.vevent.com/register/BIbb7f6b70b4ce4820b6391059390d6139
About Veracyte
Veracyte (Nasdaq: VCYT) is a global diagnostics company whose vision is to transform cancer care for patients all over the world. We empower clinicians with the high-value insights they need to guide and assure patients at pivotal moments in the race to diagnose and treat cancer. Our Veracyte Diagnostics Platform delivers high-performing cancer tests that are fueled by broad genomic and clinical data, deep bioinformatic and AI capabilities, and a powerful evidence-generation engine, which ultimately drives durable reimbursement and guideline inclusion for our tests, along with new insights to support continued innovation and pipeline development. For more information, please visit www.veracyte.com or follow us on LinkedIn or X (Twitter).
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements, including, but not limited to our statements related to our plans, objectives, and expectations (financial and otherwise), including with respect to 2024 financial and operating results; and our intentions with respect to our tests and products, for use in diagnosing and treating diseases, in and outside of the United States. Forward-looking statements can be identified by words such as: “appears,” “anticipate,” “intend,” “plan,” “expect,” “believe,” “should,” “may,” “will,” “enable,” “positioned,” “offers,” “designed” and similar references to future periods. Actual results may differ materially from those projected or suggested in any forward-looking statements. These statements involve risks and uncertainties, which could cause actual results to differ materially from our predictions, and include, but are not limited to: our ability to launch, commercialize and receive reimbursement for our products; our ability to execute on our business strategies relating to the C2i Genomics acquisition, integration of the business and the realization of expected benefits and synergies; our ability to demonstrate the validity and utility of our genomic tests and biopharma and other offerings; our ability to continue executing on our business plan; our ability to continue to scale our global operations and enhance our internal control environment; the impact of the war in Ukraine and other regional conflicts on European economies and our facilities in France; the impact of foreign currency fluctuations, increasing interest rates, inflation, the U.S. election and turmoil in the global banking and finance system; the ongoing conflict in the Middle East and the performance and utility of our tests in the clinical environment. Additional factors that may impact these forward-looking statements can be found under the caption “Risk Factors” in our Annual Report on Form 10-K filed on February 29, 2024, and our Quarterly Report on Form 10-Q filed for the three months ended June 30, 2024, to be filed August 7, 2024, as well as in other documents that we may file from time to time with the Securities and Exchange Commission. Copies of these documents, when available, may be found in the Investors section of our website at investor.veracyte.com. These forward-looking statements speak only as of the date hereof and, except as required by law, we specifically disclaim any obligation to update these forward-looking statements or reasons why actual results might differ, whether as a result of new information, future events or otherwise.
Veracyte, the Veracyte logo, Decipher, C2i Genomics, and Afirma are registered trademarks of Veracyte, Inc., and its subsidiaries in the U.S. and selected countries.
Note Regarding Use of Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), this press release and the accompanying tables contain, and reference certain non‐GAAP results including non-GAAP gross margin, non-GAAP operating expenses, adjusted EBITDA and non-GAAP earnings per share (EPS). These non-GAAP financial measures are not meant to be considered superior to or a substitute for financial measures calculated in accordance with GAAP, and investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool.
We use non-GAAP financial measures to internally evaluate and analyze financial results. We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and enable comparison of our financial results with other public companies, many of which present similar non-GAAP financial measures. However, the non-GAAP financial measures we present may be different from those used by other companies.
We exclude amortization of acquired intangible assets, acquisition-related expenses relating to our acquisitions of Decipher Biosciences, HalioDx and C2i Genomics, impairment charges associated with the nCounter license and other biopharmaceutical services related to HalioDx intangible assets, all stock-based compensation and certain costs related to restructuring from certain of our non-GAAP financial measures. Beginning in the second quarter of 2024, we changed our non-GAAP policy to exclude all stock-based compensation to align with our peers and we have also excluded all stock-based compensation from our prior period non-GAAP financial measures. Management has excluded the effects of these items in non-GAAP financial measures to help investors gain a better understanding of the core operating results and future prospects of the company, consistent with how management measures and forecasts the company's performance, especially when comparing such results to previous periods or forecasts. The company encourages investors to carefully consider its results under GAAP, as well as its supplemental non‐GAAP information and the reconciliation between these presentations, to more fully understand its business.
| VERACYTE, INC. | ||||||||
|---|---|---|---|---|---|---|---|---|
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (Unaudited) | ||||||||
| (In thousands, except share and per share amounts) | ||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||
| 2024 | 2023 | 2024 | 2023 | |||||
| Revenue: | ||||||||
| Testing revenue | $ | 106,970 | $ | 81,749 | $ | 197,273 | $ | 154,145 |
| Product revenue | 3,906 | 4,011 | 7,443 | 7,903 | ||||
| Biopharmaceutical and other revenue | 3,552 | 4,562 | 6,556 | 10,696 | ||||
| Total revenue | 114,428 | 90,322 | 211,272 | 172,744 | ||||
| Cost of revenue: (1) | ||||||||
| Cost of testing revenue | 27,920 | 23,333 | 53,899 | 42,981 | ||||
| Cost of product revenue | 1,874 | 2,315 | 4,518 | 4,477 | ||||
| Cost of biopharmaceutical and other revenue | 3,812 | 4,040 | 6,650 | 8,459 | ||||
| Intangible asset amortization - cost of revenue | 2,909 | 4,814 | 5,824 | 9,618 | ||||
| Total cost of revenue | 36,515 | 34,502 | 70,891 | 65,535 | ||||
| Gross profit | 77,913 | 55,820 | 140,381 | 107,209 | ||||
| Operating expenses: (1) | ||||||||
| Research and development | 16,465 | 12,541 | 32,430 | 25,310 | ||||
| Selling and marketing | 24,216 | 25,756 | 47,998 | 51,886 | ||||
| General and administrative | 31,745 | 25,047 | 57,955 | 46,100 | ||||
| Impairment of long-lived assets | — | — | 429 | 1,410 | ||||
| Intangible asset amortization - operating expenses | 881 | 527 | 1,619 | 1,052 | ||||
| Total operating expenses | 73,307 | 63,871 | 140,431 | 125,758 | ||||
| Income (loss) from operations | 4,606 | (8,051) | (50) | (18,549) | ||||
| Other income (loss), net | 2,755 | (226) | 5,503 | 2,181 | ||||
| Income (loss) before income taxes | 7,361 | (8,277) | 5,453 | (16,368) | ||||
| Income tax provision | 1,627 | 125 | 1,583 | 125 | ||||
| Net income (loss) | $ | 5,734 | $ | (8,402) | $ | 3,870 | $ | (16,493) |
| Earnings (loss) per share: | ||||||||
| Basic | $ | 0.07 | $ | (0.12) | $ | 0.05 | $ | (0.23) |
| Diluted | $ | 0.07 | $ | (0.12) | $ | 0.05 | $ | (0.23) |
| Shares used to compute earnings (loss) per common share: | ||||||||
| Basic | 76,538,325 | 72,478,662 | 75,649,057 | 72,327,897 | ||||
| Diluted | 77,163,149 | 72,478,662 | 76,600,079 | 72,327,897 |
- Cost of revenue, research and development, sales and marketing and general and administrative expenses include the following stock-based compensation related expenses:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Cost of revenue | $ | 604 | $ | 497 | $ | 1,091 | $ | 884 | ||||
| Research and development | 1,895 | 1,439 | 3,658 | 2,696 | ||||||||
| Selling and marketing | 2,142 | 2,494 | 3,235 | 4,606 | ||||||||
| General and administrative | 5,213 | 6,019 | 9,889 | 10,364 | ||||||||
| Total stock-based compensation expense | $ | 9,854 | $ | 10,449 | $ | 17,873 | $ | 18,550 | ||||
| VERACYTE, INC. | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||
| CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) | ||||||||||||
| (Unaudited) | ||||||||||||
| (In thousands) | ||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Net income (loss) | $ | 5,734 | $ | (8,402) | $ | 3,870 | $ | (16,493) | ||||
| Other comprehensive income (loss): | ||||||||||||
| Change in currency translation adjustments | (1,703) | (917) | (6,592) | 3,563 | ||||||||
| Net comprehensive income (loss) | $ | 4,031 | $ | (9,319) | $ | (2,722) | $ | (12,930) | ||||
| VERACYTE, INC. | ||||||||||||
| --- | --- | --- | --- | --- | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
| (In thousands) | ||||||||||||
| June 30, | December 31, | |||||||||||
| 2024 | 2023 | |||||||||||
| (Unaudited) | (See Note 1) | |||||||||||
| Assets | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 235,915 | $ | 216,454 | ||||||||
| Accounts receivable | 50,304 | 40,378 | ||||||||||
| Supplies and inventory | 19,258 | 16,128 | ||||||||||
| Prepaid expenses and other current assets | 15,629 | 12,661 | ||||||||||
| Total current assets | 321,106 | 285,621 | ||||||||||
| Property, plant and equipment, net | 22,291 | 20,584 | ||||||||||
| Right-of-use assets, operating leases | 18,116 | 10,277 | ||||||||||
| Intangible assets, net | 112,532 | 88,593 | ||||||||||
| Goodwill | 752,107 | 702,984 | ||||||||||
| Restricted cash | 1,088 | 876 | ||||||||||
| Other assets | 7,087 | 5,971 | ||||||||||
| Total assets | $ | 1,234,327 | $ | 1,114,906 | ||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | $ | 12,084 | $ | 12,943 | ||||||||
| Accrued liabilities | 43,455 | 38,427 | ||||||||||
| Current portion of deferred revenue | 2,195 | 2,008 | ||||||||||
| Current portion of acquisition-related contingent consideration | 7,348 | 2,657 | ||||||||||
| Current portion of operating lease liabilities | 7,185 | 5,105 | ||||||||||
| Current portion of other liabilities | 72 | 101 | ||||||||||
| Total current liabilities | 72,339 | 61,241 | ||||||||||
| Deferred tax liabilities | 1,483 | 734 | ||||||||||
| Acquisition-related contingent consideration, net of current portion | 13,889 | 518 | ||||||||||
| Operating lease liabilities, net of current portion | 13,553 | 7,525 | ||||||||||
| Other liabilities | 540 | 786 | ||||||||||
| Total liabilities | 101,804 | 70,804 | ||||||||||
| Total stockholders’ equity | 1,132,523 | 1,044,102 | ||||||||||
| Total liabilities and stockholders’ equity | $ | 1,234,327 | $ | 1,114,906 | ||||||||
| 1. The condensed consolidated balance sheet at December 31, 2023 has been derived from the audited financial statements at that date included in the Company's Form 10-K filed with the Securities and Exchange Commission dated February 29, 2024. | ||||||||||||
| VERACYTE, INC. | ||||||||||||
| --- | --- | --- | --- | --- | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
| (Unaudited) | ||||||||||||
| (In thousands) | ||||||||||||
| Six Months Ended June 30, | ||||||||||||
| 2024 | 2023 | |||||||||||
| Operating activities | ||||||||||||
| Net income (loss) | $ | 3,870 | $ | (16,493) | ||||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||
| Depreciation and amortization | 11,328 | 13,529 | ||||||||||
| Loss on disposal of property, plant and equipment | 68 | 136 | ||||||||||
| Stock-based compensation | 17,873 | 18,366 | ||||||||||
| Deferred income taxes | 23 | 125 | ||||||||||
| Noncash lease expense | 2,287 | 1,977 | ||||||||||
| Revaluation of acquisition-related contingent consideration | 863 | (344) | ||||||||||
| Effect of foreign currency on operations | 896 | (167) | ||||||||||
| Impairment loss | 429 | 1,410 | ||||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | (10,086) | 1,789 | ||||||||||
| Supplies and inventory | (3,266) | 2,782 | ||||||||||
| Prepaid expenses and other current assets | (2,183) | (2,530) | ||||||||||
| Other assets | (1,213) | (1,048) | ||||||||||
| Operating lease liabilities | (2,446) | (2,091) | ||||||||||
| Accounts payable | (1,706) | 792 | ||||||||||
| Accrued liabilities and deferred revenue | 3,872 | (3,734) | ||||||||||
| Net cash provided by operating activities | 20,609 | 14,499 | ||||||||||
| Investing activities | ||||||||||||
| Acquisition of C2i, net of cash acquired | 5,012 | — | ||||||||||
| Purchase of short-term investments | — | (19,700) | ||||||||||
| Proceeds from sale of short-term investments | — | 39,773 | ||||||||||
| Proceeds from maturity of short-term investments | — | 5,000 | ||||||||||
| Purchases of property, plant and equipment | (4,904) | (4,662) | ||||||||||
| Net cash provided by investing activities | 108 | 20,411 | ||||||||||
| Financing activities | ||||||||||||
| Payment of taxes on vested restricted stock units | (5,135) | (3,168) | ||||||||||
| Proceeds from the exercise of common stock options and employee stock purchases | 4,260 | 5,250 | ||||||||||
| Net cash (used in) provided by financing activities | (875) | 2,082 | ||||||||||
| Increase in cash, cash equivalents and restricted cash | 19,842 | 36,992 | ||||||||||
| Effect of foreign currency on cash, cash equivalents and restricted cash | (169) | 43 | ||||||||||
| Net increase in cash, cash equivalents and restricted cash | 19,673 | 37,035 | ||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 217,330 | 154,996 | ||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 237,003 | $ | 192,031 | ||||||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH | ||||||||||||
| --- | --- | --- | --- | --- | ||||||||
| (Unaudited) | ||||||||||||
| (In thousands) | ||||||||||||
| June 30, | December 31, | |||||||||||
| 2024 | 2023 | |||||||||||
| Cash and cash equivalents | $ | 235,915 | $ | 216,454 | ||||||||
| Restricted cash | 1,088 | 876 | ||||||||||
| Total cash, cash equivalents and restricted cash | $ | 237,003 | $ | 217,330 | ||||||||
| VERACYTE, INC. | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| RECONCILIATION OF U.S. GAAP to NON-GAAP FINANCIAL MEASURES | ||||||||||||
| (Unaudited) | ||||||||||||
| (In thousands) | ||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Reconciliation of Non-GAAP Gross Margin: | ||||||||||||
| GAAP Gross Profit | $ | 77,913 | $ | 55,820 | $ | 140,381 | $ | 107,209 | ||||
| GAAP Gross Margin | 68 | % | 62 | % | 66 | % | 62 | % | ||||
| Amortization of intangible assets | 2,909 | 4,814 | 5,824 | 9,618 | ||||||||
| Stock-based compensation expense | 604 | 497 | 1,091 | 884 | ||||||||
| Acquisition related expenses (1) | — | — | 60 | 74 | ||||||||
| Other adjustments (2) | — | — | 6 | — | ||||||||
| Non-GAAP Gross Profit | $ | 81,426 | $ | 61,131 | $ | 147,362 | $ | 117,785 | ||||
| Non-GAAP Gross Margin | 71 | % | 68 | % | 70 | % | 68 | % | ||||
| Reconciliation of Non-GAAP Operating Expenses: | ||||||||||||
| GAAP research and development | $ | 16,465 | $ | 12,541 | $ | 32,430 | $ | 25,310 | ||||
| Stock-based compensation expense | (1,895) | (1,439) | (3,658) | (2,696) | ||||||||
| Acquisition related expenses (1) | 23 | — | (397) | — | ||||||||
| Other adjustments (2) | 2 | — | (276) | — | ||||||||
| Non-GAAP research and development | $ | 14,595 | $ | 11,102 | $ | 28,099 | $ | 22,614 | ||||
| GAAP sales and marketing | $ | 24,216 | $ | 25,756 | $ | 47,998 | $ | 51,886 | ||||
| Stock-based compensation expense | (2,142) | (2,494) | (3,235) | (4,606) | ||||||||
| Acquisition related expenses (1) | — | (567) | (124) | (1,158) | ||||||||
| Other adjustments (2) | (194) | — | (1,094) | — | ||||||||
| Non-GAAP sales and marketing | $ | 21,880 | $ | 22,695 | $ | 43,545 | $ | 46,122 | ||||
| GAAP general and administrative | $ | 31,745 | $ | 25,047 | $ | 57,955 | $ | 46,100 | ||||
| Stock-based compensation expense | (5,213) | (6,019) | (9,889) | (10,364) | ||||||||
| Acquisition related expenses (1) | (1,116) | (1,134) | (4,585) | (1,624) | ||||||||
| Other adjustments (2) | (2,854) | — | (3,120) | 66 | ||||||||
| Non-GAAP general and administrative | $ | 22,562 | $ | 17,894 | $ | 40,361 | $ | 34,178 | ||||
| GAAP total operating expenses | $ | 73,307 | $ | 63,871 | $ | 140,431 | $ | 125,758 | ||||
| Amortization of intangible assets | (881) | (527) | (1,619) | (1,052) | ||||||||
| Stock-based compensation expense | (9,250) | (9,952) | (16,782) | (17,666) | ||||||||
| Acquisition related expenses (1) | (1,093) | (1,701) | (5,536) | (2,782) | ||||||||
| Other adjustments (2) | (3,046) | — | (4,490) | (1,344) | ||||||||
| Non-GAAP total operating expenses | $ | 59,037 | $ | 51,691 | $ | 112,004 | $ | 102,914 | ||||
| 1.Includes transaction-related expenses as well as post-combination compensation expenses. For the three months ended June 30, 2024, adjustments consist primarily of transaction related expenses associated with the acquisition of C2i Genomics ($1.0 million) and adjustments relating to the remeasurement of contingent consideration related to our adoption of a multi-platform IVD strategy ($0.1 million). For the three months ended June 30, 2023, adjustments consist primarily of post-combination compensation expenses associated with the acquisition of HalioDx. For the six months ended June 30, 2024, adjustments consist of transaction related expenses associated with the acquisition of C2i Genomics. For the six months ended June 30, 2023, adjustments consist primarily of post-combination compensation expenses associated with the acquisition of HalioDx. | ||||||||||||
| --- | ||||||||||||
| 2.For the three months ended June 30, 2024, adjustments primarily include expense related to restructuring costs associated with a reduction in our Biopharmaceutical and Other segment ($2.9 million) and expense related to restructuring costs associated with portfolio prioritization including the reduction in Envisia commercial support ($0.2 million). For the six months ended June 30, 2024, adjustments include additional restructuring costs associated with the portfolio prioritization including the reduction in Envisia commercial support ($1.4 million). For the six months ended June 30, 2023, includes $1.3 million related to impairment charges. | ||||||||||||
| VERACYTE, INC. | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||
| RECONCILIATION OF U.S. GAAP to NON-GAAP FINANCIAL MEASURES | ||||||||||||
| (Unaudited) | ||||||||||||
| (In thousands) | ||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Reconciliation of Adjusted EBITDA: | ||||||||||||
| GAAP Net Income (Loss) | $ | 5,734 | $ | (8,402) | $ | 3,870 | $ | (16,493) | ||||
| Amortization of intangible assets | 3,790 | 5,341 | 7,443 | 10,670 | ||||||||
| Depreciation expense | 1,948 | 1,518 | 3,885 | 2,859 | ||||||||
| Stock-based compensation expense | 9,854 | 10,449 | 17,873 | 18,550 | ||||||||
| Acquisition related expenses (1) | 1,093 | 1,701 | 5,596 | 2,856 | ||||||||
| Other expense (income), net (2) | (3,052) | 287 | (6,313) | (1,902) | ||||||||
| Other adjustments (3) | 3,046 | — | 4,496 | 1,344 | ||||||||
| Income tax expense (benefit) | 1,627 | 125 | 1,583 | 125 | ||||||||
| Adjusted EBITDA | $ | 24,040 | $ | 11,019 | $ | 38,433 | $ | 18,009 | ||||
| Reconciliation of Non-GAAP Net Income (Loss) | ||||||||||||
| GAAP Net Income (Loss) | $ | 5,734 | $ | (8,402) | $ | 3,870 | $ | (16,493) | ||||
| Amortization of intangible assets | 3,790 | 5,341 | 7,443 | 10,670 | ||||||||
| Stock-based compensation expense | 9,854 | 10,449 | 17,873 | 18,550 | ||||||||
| Acquisition related expenses (1) | 1,093 | 1,701 | 5,596 | 2,856 | ||||||||
| Other adjustments (3) | 3,046 | — | 4,496 | 1,344 | ||||||||
| Tax adjustments (4) | (114) | (551) | (1,246) | (1,127) | ||||||||
| Non-GAAP Net Income | $ | 23,403 | $ | 8,538 | $ | 38,032 | $ | 15,800 | ||||
| Reconciliation of Non-GAAP Earnings per Share | ||||||||||||
| Diluted earnings per share, GAAP | $ | 0.07 | $ | (0.12) | $ | 0.05 | $ | (0.23) | ||||
| Amortization of intangible assets | 0.05 | 0.07 | 0.10 | 0.15 | ||||||||
| Stock-based compensation expense | 0.13 | 0.14 | 0.23 | 0.26 | ||||||||
| Acquisition related expenses (1) | 0.01 | 0.02 | 0.07 | 0.04 | ||||||||
| Other adjustments (3) | 0.04 | — | 0.06 | 0.02 | ||||||||
| Tax adjustments (4) | — | (0.01) | (0.02) | (0.02) | ||||||||
| Rounding and impact of dilutive shares | — | 0.02 | 0.01 | (0.01) | ||||||||
| Diluted earnings per share, non-GAAP | $ | 0.30 | $ | 0.12 | $ | 0.50 | $ | 0.21 | ||||
| Weighted average shares outstanding used in computing diluted earnings per share | ||||||||||||
| Diluted, GAAP | 77,163,149 | 72,478,662 | 76,600,079 | 72,327,897 | ||||||||
| Dilutive effect of equity awards (5) | — | 1,221,721 | — | 1,354,135 | ||||||||
| Diluted, non-GAAP | 77,163,149 | 73,700,383 | 76,600,079 | 73,682,032 | ||||||||
| 1.Includes transaction-related expenses as well as post-combination compensation expenses. For the three months ended June 30, 2024, adjustments consist primarily of transaction related expenses associated with the acquisition of C2i Genomics ($1.0 million) and adjustments relating to the remeasurement of contingent consideration related to our adoption of a multi-platform IVD strategy ($0.1 million). For the three months ended June 30, 2023, adjustments consist primarily of post-combination compensation expenses associated with the acquisition of HalioDx. For the six months ended June 30, 2024, adjustments consist of transaction related expenses associated with the acquisition of C2i Genomics. For the six months ended June 30, 2023, adjustments consist primarily of post-combination compensation expenses associated with the acquisition of HalioDx. | ||||||||||||
| --- | ||||||||||||
| 2.Includes interest income and income related to research tax credits. | ||||||||||||
| 3.For the three months ended June 30, 2024, adjustments primarily include expense related to restructuring costs associated with a reduction in our Biopharmaceutical and Other segment ($2.9 million) and expense related to restructuring costs associated with portfolio prioritization including the reduction in Envisia commercial support ($0.2 million). For the six months ended June 30, 2024, adjustments include additional restructuring costs associated with the portfolio prioritization including the reduction in Envisia commercial support ($1.4 million). For the six months ended June 30, 2023, includes $1.3 million related to impairment charges. | ||||||||||||
| 4.Incremental non-GAAP tax expense reflects the tax impact of the non-GAAP adjustments listed. | ||||||||||||
| 5.In those periods in which GAAP net (loss) income is negative and Non-GAAP net (loss) income is positive, Non-GAAP diluted weighted average shares outstanding includes potentially dilutive common shares from equity awards as determined using the treasury stock method. |
# # #
Investors:
Shayla Gorman
investors@veracyte.com
619-393-1545
Media:
Tracy Morris
media@veracyte.com
650-380-4413