Veracyte, Inc.

Good day and thank you for standing by. Welcome to the Verisight fourth quarter 2025 financial results webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Shayla Gorman, Senior Director, Investor Relations. Please go ahead.

Good afternoon, everyone, and thank you for joining us today for a discussion of our fourth quarter and full year 2025 financial results. With me today are Mark Stathley, Verisight's Chief Executive Officer, and Rebecca Chambers, our Chief Financial Officer. Dr. John Light, our Chief Commercial Officer, and Dr. Phil Febo, our Chief Medical and Scientific Officer, will join us for Q&A. Verisight issued a press release earlier this afternoon detailing our fourth quarter and full year 2025 financial results. This release and a copy of the presentation we will review during the call today are available in the Investors section of our website at Verisight.com. Before we begin, I'd like to remind you that statements we make during this call will include forward-looking statements as defined under applicable securities laws. Forward-looking statements are subject to risks and uncertainties, and the company can give no assurance they will prove to be correct. Additionally, we are not under any obligation to provide further updates on our business trends or our performance during the quarter. To better understand the risks and uncertainties that could cause actual results to differ, we refer you to the documents that Verisight files with the Securities and Exchange Commission including the most recent Forms 10-Q and 10-K. In addition, this call will include certain non-GAAP financial measures. Reconciliation of these measures to the most directly comparable GAAP financial measures are included in today's earnings release, accessible from the Investors section of Verisight's website. I will now turn the call over to Mark Stapley, Verisight's CEO.

Mark Stapley, Verisight's CEO Thank you, Shayla, and thank you all for joining us today. Q4 capped off another outstanding year of strong execution for Verisight, with performance across our core businesses that reinforces both the durability of our growth model and the opportunities ahead. I'll review our fourth quarter results, reflect briefly on 2025, and then focus on the growth drivers that give us confidence as we move into 2026. Fourth quarter total revenue was $141 million, representing 19% growth year over year. This performance was driven by continued strength in our core testing business, which grew 21% on strong volume and ASP. Decipher volume grew 21% and Affirma grew 12%, together contributing to 16% total testing volume growth. For the full year, we delivered total revenue of $517 million at the high end of our preliminary range and representing 16% growth. During the year, we provided clinically actionable information to nearly 170,000 patients, with over 800,000 patients served to date. We remain on track to testing our one millionth patient later this year, an important milestone for the company and our team that reflects both the scale and impact of our platform. In addition to our strong revenue and volume growth, we executed against all of the key milestones we set for 2025. We drove continued penetration and share gains, launched Decipher for metastatic patients, expanding our presence in advanced disease, and generated meaningful new clinical evidence across endocrinology and neurology. We advanced our pipeline with positive pro-signet outcomes data from the Optima prelim study, submitted the technical assessment for true MRD, and completed enrollment for our Nightingale lung cancer study. Together, these accomplishments position us well for multiple product launches beginning in 2026. Importantly, we achieved this while delivering industry-leading profitability and cash generation. Adjusted EBITDA margin exceeded 27% in 2025, not only reaching but surpassing our 25% target more than a year ahead of plan. We also completed key operational priorities, including the restructuring of Verisight SAS, and the full transition of all Affirma volume to the more scalable, lower-cost v2 transcriptome platform, improving our operational efficiency in launching new transcriptome-based tests. These actions support the sustainability of our financial profile as we continue to invest in growth. I'm extremely proud of our team's focus on execution and innovation, which enabled us to deliver an outstanding year and reach more patients than ever before. The foundation we've built through the Verisight Diagnostics platform supports a clear phased expansion strategy anchored by a focused set of drivers contributing to near, mid, and long-term growth. First is the ongoing durable expansion in our core business, Decipher and Affirma, which we believe will support double-digit revenue growth for the foreseeable future. The second phase is our 2026 product expansions with two product launches planned by this summer. We are preparing to launch our inaugural TrueMRD test for patients recovering from muscle invasive bladder cancer, followed by the US launch of Procigna as an LDT to address early stage breast cancer patients. The third phase represents our longer term commitments, including geographic expansion through our IBD strategy and addressing new cancer challenges across the care continuum. Today, I will focus on the first two phases, our core business momentum and the opportunities ahead with our 2026 launches. Starting with Affirma, we delivered approximately 18,250 tests in the fourth quarter, representing 12% volume growth. Throughout the year, we saw a steady pipeline of new account wins and increased utilization per account, with the fourth quarter continuing this trend. As of year end, we believe we have grown Affirma to approximately 38% market share, with continued opportunity for further penetration. Importantly, as previously mentioned, we completed the full transition to our V2 transcriptome in the lab during the fourth quarter. Besides being more scalable and cost effective, this new platform enables us to deliver results in challenging cases where we were previously unable due to low RNA. In the fourth quarter, our no result rate was 2% lower than in the prior quarter, directly contributing to more patients and physicians receiving actionable results to support clinical decision-making. We also saw a steady drumbeat of new publications leveraging data generated from our research-use-only Afirma grid, which further builds on our extensive body of clinical evidence. The majority of Afirma-related abstracts and publications in 2025 were grid-related, reinforcing Afirma's position as not only the standard of care and clinical testing, but also what we believe is becoming the primary research platform advancing understanding of thyroid nodules and cancer. This year, we plan to build on this momentum with an updated version of GRID that includes additional signatures designed to support ongoing thyroid nodule research. Given our recent progress, we're confident in the firm's ability to sustain healthy growth in 2026 and beyond. Turning to Decipher. We delivered approximately 27,200 tests in Q4, marking our 15th consecutive quarter of more than 20% year-over-year volume growth. We reached another record for both the number of quarterly ordering providers and orders per physician. In fact, the number of ordering physicians increased 18% year-over-year in Q4, reflecting Decipher's expanding adoption and its role in supporting treatment decision-making. This momentum has been building throughout the year Of the more than 300,000 prostate cancer patients tested with Decipher since launch, more than 100,000 were tested in 2025 alone. Decipher is recognized as the only gene expression test with high-quality evidence in NCCN guidelines, which we believe has been an important contributor to this impressive growth. Looking ahead, with the market now penetrated by Decipher at approximately 33%, we remain extremely confident in its ability to sustain strong double-digit growth in 2026 and beyond. This growth outlook is supported by several key drivers. As grid-enabled research establishes clinical utility for new prostate signatures, we plan to expand our clinical reporting to incorporate these insights. Our first examples are three new predictive signatures, AUTOS, PTEN, and PAM50. that are now widely recognized by key opinion leaders as having utility based on recently published studies. Patients with higher auto scores have been shown to benefit from higher doses of radiation in both post-biopsy and post-RP salvage settings. B10, used alongside the Decipher score, showed promise in the Stampede study for identifying which metastatic patients would benefit from adding chemotherapy. And the BALANCE trial whose results were presented at ASTRO last fall, found that the PAM50 molecular signature confidently predicts which patients with the current prostate cancer may benefit from hormone therapy with apalutamide in addition to salvage radiation therapy. We are working to add these molecular features to the Decipher report as optional insights, providing additional information for men with high-risk biopsy and RP disease, including those with biochemical recurrence. As a reminder, This patient population has been underserved to date, a trend that we have been focused on improving with augmented clinical evidence supporting Decipher in advanced disease, where its predictive power has been shown to improve patient outcomes. This focus, paired with the launch of Decipher Metastatic, has led to another quarter of more than 30% growth in the combined high-risk RP and metastatic categories, and we believe there remains significant opportunity to expand Decipher's use in advanced disease. Additionally, we view digital pathology and AI-powered analysis as complementary to molecular analysis, with the potential for additional data points to provide a more comprehensive assessment of tumor histology. To support further research, we made our digital pathology services and associated AI models available to collaborators last year and have implemented slide scanning as a standard production workflow. We have now scanned over 210,000 slides from over 150,000 patients with outcomes data, representing the majority of our historical data set on this cipher. We plan to leverage this extensive database in combination with whole transcriptomes in an expanding number of collaborations with top academic centers to understand the complementary nature of these two data types in order to continue to evolve our clinical offerings. Generating clinical evidence is a core pillar of our VeriCyte diagnostics platform, and we continue to fuel this flywheel. Decipher Prostate now has more than 100 publications demonstrating its clinical utility and validity across the prostate cancer risk spectrum, plus an additional 100 publications leveraging our research use-only grid platform. At ASCO-GU, data to be presented, including more than 15 abstracts across prostate and bladder cancer, highlight how our platform is contributing to advances in urologic oncology. Multiple abstracts will showcase the power of Decipher GRID to enable novel research, including studies demonstrating how signatures derived from GRID predict adverse outcomes in men on active surveillance. Additionally, several abstracts will be presented, leveraging real-world data on the usage of the Decipher prostate score in our patient population, including those with metastatic prostate cancer. Moving to bladder cancer. Our Decipher Bladder Classifier and associated research use-only grid data is increasingly being integrated into studies that aim to help researchers identify critical signatures to guide the future of bladder cancer treatment. We're seeing strong momentum generating new clinical evidence for this indication, with five abstracts highlighting Decipher Bladder at ASCO-GU. We're particularly excited about the findings from the SHORE-02 trial, which underscore the importance of molecular subtyping in muscle invasive bladder cancer, or MIBC, and support integrating genomic classifiers like Decipher Bladder into clinical trial design and treatment planning. As the field transitions towards more biologically informed evaluation of novel treatment strategies in bladder cancer, we plan to continue investing in this indication to drive future growth. Collectively, These studies highlight how our deciphered tests are increasingly helping guide clinical decision-making, advance biological understanding, and accelerate innovation in urologic cancer care. This momentum in bladder cancer extends to our TrueMRD platform, our whole genome sequencing approach to MRD. We remain on track to launch our first indication for MIBC in the first half of this year after completing our technology assessment with MoldyX to receive reimbursement, which is in progress. We intend to leverage our strong Decipher brand and channel to serve patients that are treated in the urology and radiation oncology setting, which we believe reaches approximately 70% of MIBC cases. Our initial focus will be on recurrence monitoring in those patients who have completed their initial therapy for MIBC and are not undergoing adjuvant chemotherapy, which we believe is the majority of MIBC patients treated in this setting. We're building a strong and growing body of clinical evidence around our MRD platform. At ASCO-GU, TruMRD will be featured in an oral presentation on a phase two trial evaluating PEMBRO combined with serial CT DNA monitoring in patients with MIBC that did not undergo radical cystectomy. In this trial, TruMRD's whole genome sequencing was used during neoadjuvant therapy at restaging and during surveillance to monitor for residual disease providing more confidence that the cancer was responding to therapy. The results demonstrate that many patients with MIBC may be successfully treated without bladder removal and maintain very low risk of metastatic recurrence. These findings highlight how molecular monitoring may support bladder-sparing treatment strategies while maintaining confidence in managing disease. This therapeutic strategy is being prospectively evaluated in the actively accruing neoblast study conducted at the University of British Columbia. In addition, there are several other studies that have already been completed across bladder, colorectal, and lung cancer, as well as other indications. We have a deep pipeline of additional studies underway with 10 in testing or analysis, 13 in contracting, and 17 in active planning. spanning MIBC as well as non-muscle invasive bladder cancer, breast, lung, colorectal, and immunotherapy treatment response. TrueMRD is a platform that is extensible into other cancer types, and we plan to launch additional indications each year going forward. Our MIBC launch addresses a clinically important market and will serve, we believe, as a foundational proof point that Verisight is a credible player in this large and expanding space. With strong engagement from leading institutions and encouraging early results, we believe TruMRD's differentiated approach positions us well to capture meaningful share in the MRD market. Turning now to Procigna, our second major product launch plan for 2026. Procigna is based on the well-established and scientifically validated PAM50 signature. which provides physicians and patients with deeper insights into the biological classification of their cancer and the risk of recurrence to help inform treatment decisions. The opportunity in the U.S. breast cancer market is significant, with over 300,000 patients diagnosed each year. Approximately 75% of these patients have early stage hormone receptor positive disease and would be eligible for ProSigna testing. Clinical data will be an important driver of adoption and we look forward to the full Optima trial readout, which we expect to be presented at ASCO in June. We believe this data will further strengthen the clinical evidence supporting Prosigna, differentiating it as the next standard in breast cancer prognosis, and that numerous ongoing studies will further demonstrate the differentiation of Prosigna in this setting, building on the Optima results. We believe this body of evidence supports the opportunity for Prosigna to capture meaningful share in this market over the next five years. We remain on track to launch our LDT for ProSigna over the summer on our new transcriptome lab workflow, the same analytical platform we have built and fully launched for Affirma. To prepare for this, we've begun building out our commercial team, starting with appointing a strong leader for the sales force, while also growing our medical science liaison team and engaging KOLs. Meanwhile, our talented marketing team is busy working on all of our prelaunch activities, while our fantastic market access team is working on the Medicare and commercial reimbursement coverage. I couldn't be more excited about our two major product launches this year. The foundation we have built over the last five years, including our track record of meeting or exceeding our expectations while expanding our leadership across the cancer care continuum, reinforces the durability of our growth outlook. Our execution across Decipher and Affirma, combined with our ability to navigate through evolving market dynamics, reflects the strength and resilience of our operating model. we are entering 2026 with a clear path to sustain double-digit growth, served by a portfolio of tests in prostate, thyroid, bladder, and breast. This momentum positions us to deliver lasting value for the patients we serve, the employees who power our mission, and our shareholders. With that, I will now turn the call over to Rebecca to review our financial results for the fourth quarter and full year, as well as our outlook for 2026.