How did VCYT's Q4 earnings surprise investors?

Veracyte's Q4 2024 earnings report surprised investors with a significant decline in net income growth, despite strong revenue performance and earnings beat expectations.

1. **Revenue Performance**: Veracyte achieved record revenue for Q4 2024, reaching $118.6 million, marking a 21% increase year-over-year. This growth was driven by a 24% increase in testing revenue, which reached $112.2 million. The full-year revenue for 2024 was $446 million, indicating a 23% increase year-over-year.

|code|Ticker|Name|Date|Percentage Change|Percentage Change YoY|market_code|
|---|---|---|---|---|---|---|
|VCYT|VCYT.O|Veracyte|20240102|-0.3999||185|
|VCYT|VCYT.O|Veracyte|20240103|-5.146||185|
|VCYT|VCYT.O|Veracyte|20240104|-1.7314||185|
|VCYT|VCYT.O|Veracyte|20240105|0.7439||185|
|VCYT|VCYT.O|Veracyte|20240108|13.0976||185|
|VCYT|VCYT.O|Veracyte|20240109|-2.7835||185|
|VCYT|VCYT.O|Veracyte|20240110|-3.1106||185|
|VCYT|VCYT.O|Veracyte|20240111|-1.7147||185|
|VCYT|VCYT.O|Veracyte|20240112|-1.559||185|
|VCYT|VCYT.O|Veracyte|20240116|0.3771||185|

2. **Earnings Performance**: The company reported a net income of $5.11 million for Q4 2024, which represented a significant decline of -66.26% when compared to the previous quarter. However, when compared to the same quarter in the previous year, the net income showed a substantial improvement, growing by 71.4%. The earnings per share (EPS) for Q4 2024 was $0.06, which fell short of the estimated $0.06.
3. **Stock Market Reaction**: Despite the strong revenue performance and earnings beat expectations, Veracyte's stock fell by 8.28% in aftermarket trading, closing at $36.10. This decline suggests that investors may have had concerns about the company's long-term growth prospects or other factors not reflected in the earnings report.
4. **Investor Perception**: The mixed reaction from investors can be attributed to the decline in net income growth, even though the company achieved robust revenue and exceeded earnings expectations. The market may have had concerns about the sustainability of the revenue growth and the company's future performance.

In conclusion, while Veracyte's Q4 2024 earnings report showed strong revenue growth and an earnings beat, the significant decline in net income growth and a subsequent stock price drop highlighted the challenges and uncertainties in the market's perception of the company's financial health and future prospects.