Veracyte 2025 Q2 Earnings Loss Widens as Revenue Surges 13.8%

Veracyte (VCYT) reported its fiscal 2025 Q2 earnings on Aug 7, 2025, with the company beating revenue expectations and raising full-year guidance. The stock has shown robust price action, climbing 6.46% on the latest trading day. The firm’s testing revenue, driven by Decipher and Afirma, increased by 14% year-over-year to $122.26 million, while full-year revenue guidance was raised to $496–504 million.

Revenue
Veracyte's total revenue for Q2 2025 rose 13.8% year-over-year to $130.16 million, driven by strong performance in its testing segment. Testing revenue accounted for the majority at $122.26 million, with a 14% year-over-year increase. This growth was primarily fueled by continued momentum in the Decipher and Afirma tests, which saw volume increases of 28% and 8%, respectively. Product revenue, which includes IVD development and manufacturing, declined slightly to $3.60 million. However, biopharmaceutical and other revenue increased to $4.30 million, reflecting a 21% year-over-year growth. No intangible asset amortization was recorded in the cost of revenue for the quarter.

Earnings/Net Income
Veracyte swung to a net loss in Q2 2025, reporting a net loss of $980,000 or $0.01 per share, compared to a profit of $5.73 million or $0.07 per share in the prior-year period. The GAAP net loss was primarily driven by a one-time impairment charge of $20.5 million related to the resolution of the French subsidiary proceedings. Despite the loss, non-GAAP diluted net earnings per share improved to $0.44, an increase of $0.14 compared to the prior-year period. The EPS performance, while showing a negative swing under GAAP, indicates an improvement under non-GAAP measures, demonstrating underlying operational strength.

Price Action
Veracyte’s stock price has experienced a sharp rebound in recent trading, with gains of 6.46% in the latest day and 17.74% in the previous week. Over the past month, the stock has climbed 4.14%, outperforming the SPY ETF’s modest gains. This strong post-earnings price action reflects investor confidence in the company’s revenue beat and long-term growth prospects.

Post Earnings Price Action Review
Veracyte delivered a strong earnings surprise in Q2, surpassing revenue estimates by 7.6% with total revenue of $130.2 million. The stock responded positively, rising 14.3% in the two weeks following the report, significantly outperforming the SPY ETF’s 0.3% return. This favorable market reaction was underpinned by improved profitability metrics, including a non-GAAP gross margin increase to 71.5% and adjusted EBITDA of $35.8 million, representing 27.5% of revenue. These metrics, along with the company’s guidance for $496–504 million in full-year revenue, suggest a strong potential for 30-day returns. However, investors should be mindful of recent volatility, as the stock has underperformed in the past three months, returning -9.4% versus the SPY ETF’s 13.5%. While the earnings-driven strategy appears promising, it is not without risks, and investors should assess their risk tolerance before committing capital.

CEO Commentary
CEO Marc Stapley highlighted Veracyte’s strong business performance in Q2, noting Decipher's 25%+ year-over-year volume growth for the 13th consecutive quarter and Afirma volume meeting expectations. The resolution of the French subsidiary proceedings has positioned the company for strategic investments in the second half of 2025 and beyond. Stapley expressed optimism about sustained long-term revenue growth, emphasizing the company’s differentiated platform and growing clinical evidence. He reaffirmed Veracyte’s commitment to improving patient outcomes globally.

Guidance
Veracyte raised full-year 2025 revenue guidance to $496–504 million, up from prior guidance of $470–480 million. Testing revenue guidance was also raised to $477–483 million, implying 14–15% year-over-year growth. Adjusted EBITDA as a percentage of revenue guidance was raised to 23.5% in 2025 from 22.5%, reflecting improved profitability. The company’s guidance underscores confidence in long-term revenue and margin expansion, supported by continued growth in its core tests and operational restructuring.

Additional News
Veracyte completed the sale of its manufacturing operations in France, with the Marseille Commercial Court approving the transfer of Veracyte SAS to Helio Diagnostics SAS. This transaction closed on August 1, 2025, leading to a $20.5 million impairment charge. The company also initiated full-year revenue guidance of $496–504 million and raised testing revenue guidance to $477–483 million. Veracyte announced the full launch of Decipher for use in the metastatic population and demonstrated the utility of its genomic classifiers through 29 abstracts and nine new publications. In addition, clinical data from the OPTIMA Prelim study was presented at the ESMO Breast Cancer Annual Congress, further reinforcing the company’s strong R&D pipeline.