VCYT Stock Gains on Q2 Earnings and Revenue Beat, Margins Up

Veracyte, Inc. VCYT delivered second-quarter 2025 adjusted earnings of 44 cents per share, which marked a stupendous improvement of 46.7% from the year-ago period’s figure of 30 cents. The bottom line beat the Zacks Consensus Estimate by 41.9%.

The company’s GAAP loss per share (EPS) was 1 cent compared to the year-ago period’s earnings of 7 cents per share.

Following the earnings announcement, VCYT’s share price gained 15.5% last Thursday.

VCYT’s Q2 Revenues

Revenues increased 13.8% year over year to $130.2 million, which outpaced the Zacks Consensus Estimate by 7.1%.

VCYT’s Q2 Segmental Details

Testing revenues totaled $122.3 million, up 14% year over year. This rise was mainly due to Decipher and Afirma revenue growth of 24% and 5%, respectively. Testing volume improved 18% year over year to 42,441 tests.

Product revenues fell 8% year over year to $3.6 million.

Biopharmaceutical and other revenues of $4.3 million reflected a 21% increase from the prior-year quarter’s figure.

Margins

The total cost of revenues (product, testing, biopharmaceutical and other) was $37.7 million, up 12.3% year over year.

The gross profit rose 14.4% to $92.4 million. The gross margin expanded 38 basis points (bps) to 71%.

Selling and marketing expenses rose 4.5% to $25.3 million, while general and administrative expenses increased 1.8% to $32.3 million. R&D expenses totaled $16.3 million, down 1.2% year over year. The adjusted operating margin was 14.2%, which expanded 689 bps year over year.

VCYT’s Cash, Capital Structure and Solvency

Veracyte exited second-quarter 2025 with cash and cash equivalents of $219.5 million compared with $186.1 million at the end of the first quarter.

The cumulative net cash provided from operating activities at the end of the reported quarter was $39 million compared with $20.6 million a year ago.

VCYT’s 2025 Guidance

Veracyte raised its full-year 2025 testing revenue guidance. The company expects testing revenues to be in the range of $477-$483 million (up from $470-$480 million), implying 14% to 15% year-over-year growth.

Veracyte, Inc. Price, Consensus and EPS Surprise

Veracyte, Inc. price-consensus-eps-surprise-chart | Veracyte, Inc. Quote

Given the resolution of the French subsidiary proceedings, the company initiated full-year 2025 total revenue guidance of $496-$504 million, implying 11% to 13% year-over-year growth. The Zacks Consensus Estimate for the metric is currently pegged at $501.1 billion.

The company raised guidance for adjusted EBITDA as a percentage of revenues. It is anticipated to be approximately 23.5% (up from the previous guidance of 22.5%).

Our Take

Veracyte reported better-than-expected second-quarter results, with its earnings and revenues surpassing their respective estimates. The company registered robust growth from its market-leading Decipher Prostate and Afirma tests. Meanwhile, the growth in Biopharmaceutical and other revenues was encouraging. Both margin expansion instills optimism among investors.

In the second quarter, the company had some notable developments, including the launch of Decipher Prostate Metastatic Genomic Classifier for use in patients whose prostate cancer has spread beyond the primary tumor.

Zacks Rank and Key Picks

Veracyte currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Medpace Holdings MEDP, GeneDx Holdings WGS and Cardinal Health CAH.

Medpace Holdings, currently sporting a Zacks Rank #1 (Strong Buy), reported a second-quarter 2025 EPS of $3.1, which beat the Zacks Consensus Estimate by 3.33%. Revenues of $603.3 million topped the consensus mark by 11.48%. You can see the complete list of today’s Zacks #1 Rank stocks here.

MEDP has a historical five-year earnings growth rate of 30.9% compared with the S&P 500 composite’s 10.1% growth.

GeneDx Holdings, carrying a Zacks Rank #2 (Buy) at present, posted a second-quarter 2025 adjusted EPS of 50 cents, which exceeded the Zacks Consensus Estimate by a remarkable 400%. Revenues of $102.7 million surpassed the Zacks Consensus Estimate by 21.24%.

WGS has an estimated earnings growth rate of 79.6% for 2026 compared with the industry’s 18.6% growth.

Cardinal Health, carrying a Zacks Rank #2 at present, posted third-quarter fiscal 2025 adjusted EPS of $2.35, which exceeded the Zacks Consensus Estimate by 9.3%. Revenues of $54.88 billion missed the Zacks Consensus Estimate by 0.3%.

CAH has an estimated long-term earnings growth rate of 10.9% compared with the industry’s 9.9%.

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This article originally published on Zacks Investment Research (zacks.com).

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