Veracyte, Inc. Files Q2 2024 10-Q

TL;DR

Veracyte's Q2 10-Q is in - financials and biz updates out.

AI Summary

Veracyte, Inc. filed its 10-Q for the period ending June 30, 2024. The filing details financial performance and operational updates for the second quarter of 2024. Key financial data and business segment information are presented, reflecting the company's ongoing activities in the medical laboratories sector.

Why It Matters

This filing provides investors and analysts with the latest financial and operational details for Veracyte, Inc., crucial for understanding the company's performance and future outlook.

Risk Assessment

Risk Level: low — This is a routine quarterly filing providing standard financial disclosures.

Key Numbers

• 20240630 — Period End Date (Quarterly financial reporting period)
• 20240807 — Filing Date (Date the report was submitted to the SEC)

Key Players & Entities

• VERACYTE, INC. (company) — Filer
• 20240630 (date) — Period of Report
• 20240807 (date) — Filed as of Date
• SOUTH SAN FRANCISCO (location) — Business Address City
• CALDEROME INC (company) — Former Company Name

FAQ

Key Financial Figures

• $0.001 — ch registered Common Stock, par value, $0.001 per share VCYT The Nasdaq Stock Market

Filing Documents

• vcyt-20240630.htm (10-Q) — 1650KB
• exhibit31106-30x2024.htm (EX-31.1) — 14KB
• exhibit31206-30x2024.htm (EX-31.2) — 14KB
• exhibit32106-30x2024.htm (EX-32.1) — 9KB
• exhibit32206-30x2024.htm (EX-32.2) — 9KB
• 0001384101-24-000118.txt ( ) — 6304KB
• vcyt-20240630.xsd (EX-101.SCH) — 41KB
• vcyt-20240630_cal.xml (EX-101.CAL) — 92KB
• vcyt-20240630_def.xml (EX-101.DEF) — 166KB
• vcyt-20240630_lab.xml (EX-101.LAB) — 453KB
• vcyt-20240630_pre.xml (EX-101.PRE) — 312KB
• vcyt-20240630_htm.xml (XML) — 775KB

— FINANCIAL INFORMATION

PART I. — FINANCIAL INFORMATION

Condensed Consolidated Financial Statements (Unaudited)

Item 1. Condensed Consolidated Financial Statements (Unaudited) 1 Condensed Consolidated Balance Sheets as of June 3 0 , 2024 and December 31, 2023 1 Condensed Consolidated Statements of Operations for the Three and Six Month Periods Ended June 3 0 , 2024 and 2023 2 Condensed Consolidated Statements of Comprehensive Income ( Loss ) for the Three and Six Month Periods Ended June 3 0 , 2024 and 2023 3 Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Month Periods Ended June 3 0 , 2024 and 2023 4 Condensed Consolidated Statements of Cash Flows for the Six Month Periods Ended June 3 0 , 2023 and 2023 6 Notes to Condensed Consolidated Financial Statements 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 20

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 32

Controls and Procedures

Item 4. Controls and Procedures 33

— OTHER INFORMATION

PART II. — OTHER INFORMATION

Risk Factors

Item 1A. Risk Factors 34

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 71

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 71

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 71

Other Information

Item 5. Other Information 71

Exhibits

Item 6. Exhibits 71

SIGNATURES

SIGNATURES 73 i Table of Contents VERACYTE, INC. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements concerning our business strategy and plans, future operating results and financial position, as well as our objectives and expectations for our future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by such terminology as "believe," "may," "will," "potentially," "estimate," "continue," "anticipate," "intend," "could," "would," "project," "plan," "expect" and similar expressions that convey uncertainty of future events or outcomes, although not all forward-looking statements contain these words. Forward-looking statements include, but are not limited to, statements about: the factors that may impact our financial results; our expectations regarding total revenue and total test volume; our expectations with respect to our future research and development, general and administrative and selling and marketing expenses and our anticipated uses of our funds; our expectations with respect to the impact of inflation, volatile interest rates and foreign exchange fluctuations, the war in Ukraine and the ongoing conflict in the Middle East, any impacts of the upcoming U.S. election, energy and supply chain disruptions, and the resulting market volatility on our business; our beliefs with respect to importance of maintaining libraries of clinical evidence; our expectations regarding the Percepta Nasal Swab classifier for early lung cancer classification; our expectations regarding the addition of minimal residual detection capabilities to our diagnostic platform; our expectations regarding the timing and success of our transition to offer

— FINANCIAL INFORMATION

PART I. — FINANCIAL INFORMATION

Condensed Consolidated Financial Statements-(Unaudited)

Item 1. Condensed Consolidated Financial Statements-(Unaudited) VERACYTE, INC. Condensed Consolidated Balance Sheets (unaudited) (In thousands, except share and par value amounts) June 30, 2024 December 31, 2023 (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 Commitments and contingencies Stockholders' equity: Preferred stock, $ 0.001 par value; 5,000,000 shares authorized, no shares issued and outstanding as of June 30, 2024 and December 31, 2023 — — Common stock, $ 0.001 par value; 125,000,000 shares authorized, 76,743,663 and 73,264,738 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively 77 73 Additional paid-in capital 1,627,307 1,536,168 Accumulated deficit ( 464,251 ) ( 468,121 ) Accumulated other comprehensive loss ( 30,610 ) ( 24,018 ) Total stockholders' equity 1,132,523 1,044,102 Total liabilities and stockholder

Notes to Financial Statements

Notes to Financial Statements (unaudited) 1. Organization, Description of Business and Summary of Significant Accounting Policies Veracyte, Inc., or Veracyte, or the Company, is a global diagnostics company that provides clinicians with tests for patients with, or potentially facing, a cancer diagnosis. Veracyte's tests are used by clinicians for diagnostic, prognostic and treatment decisions. Veracyte was incorporated in the state of Delaware on August 15, 2006, as Calderome, Inc. Calderome, Inc. operated as an incubator until early 2008. On March 4, 2008, the Company changed its name to Veracyte, Inc. The Company's headquarters are in South San Francisco, California, and it also has operations in San Diego, California; Austin, Texas; and Marseille, France. The Company currently offers tests in prostate cancer (Decipher Prostate); thyroid cancer (Afirma); breast cancer (Prosigna); and bladder cancer (Decipher Bladder). The Company's Percepta Nasal Swab test is being run in its Clinical Laboratory Improvement Amendments of 1988, or CLIA, certified lab in support of clinical studies and its test for lymphoma is in development as a companion diagnostic. The Company serves global markets with two complementary models. In the United States, it offers laboratory developed tests, or LDTs, through its centralized, CLIA certified laboratories in South San Francisco and San Diego, California, supported by its cytopathology expertise in Austin, Texas. Additionally, primarily outside of the United States, the Company provides its Prosigna test to patients through distribution to laboratories and hospitals that can perform the tests locally as an IVD test. In February 2024, the Company acquired C2i, a minimal residual disease, or MRD, detection company. Refer to Note 4 Business Combination for additional information. Basis of Presentation The Company's condensed consolidated financial statements have been prepared in accordance with accounting principles genera

Notes to Financial Statements

Notes to Financial Statements (unaudited) caption in the condensed consolidated statements of operations to a separate caption, intangible asset amortization - cost of revenue, within a new cost of revenue section. Use of Estimates The preparation of unaudited interim financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates include: revenue recognition; the useful lives of property, plant and equipment; the recoverability of long-lived assets; the incremental borrowing rates for leases; accounting for acquisitions; the estimation of the fair value of intangible assets and contingent consideration; stock based compensation; income tax uncertainties, including a valuation allowance for deferred tax assets; credit related losses on investments; and allowance for credit losses and contingencies. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenue and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and assumptions. Concentrations of Credit Risk and Other Risks and Uncertainties The majority of the Company's cash and cash equivalents are deposited with two major financial institutions in the United States. Deposits in these institutions may exceed the amount of insurance provided on such deposits. The Company has not realized any losses on its deposits of cash and cash equivalents other than exchange rate losses r

Notes to Financial Statements

Notes to Financial Statements (unaudited) The Company's significant third-party payers in excess of 10% of total accounts receivable and their related accounts receivable balance as a percentage of total accounts receivable were as follows: June 30, 2024 December 31, 2023 Medicare 17 % 20 % UnitedHealthcare 14 % 7 % Cash and Cash Equivalents The Company considers demand deposits in a bank, money market funds and highly liquid investments with an original maturity of 90 days or less to be cash equivalents. Restricted Cash The Company had deposits of $ 1.1 million and $ 0.9 million included in long-term assets as of June 30, 2024 and December 31, 2023, respectively, restricted from withdrawal and held by banks in the form of collateral for irrevocable standby letters of credit held as security for the Company's leases. Revenue Recognition The Company recognizes revenue in accordance with the provisions of ASC 606, Revenue from Contracts with Customers , or ASC 606. This process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. Performance obligations are considered satisfied once the Company has completed a service or transferred control of a product to the customer. In arrangements involving more than one service or good, each required service or good is evaluated to determine whether it qualifies as a distinct performance obligation based on whether (i) the customer can benefit from the service or good either on its own or together

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