Veracyte (VCYT) 4 May 232023 Q1 Earnings call transcript

Good day and thank you for standing by. Welcome to the Veracyte First Quarter 2023 Financial Results Webcast. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Gorman, conference Director like speaker to now Shayla today, of would hand over the your I Investor Relations. ahead. go Please,

Good are Chambers, Marc our joining for Veracyte's Chief of XXXX and Financial and for Stapley, results. everyone, Rebecca Officer; financial today discussion quarter our Officer. us me With Chief Executive a first afternoon, today thanks

Relations Veracyte quarter business This Investor results. with a of XXXX and in issued presentation, section release, a available press release site earlier this Web financial afternoon detailing our is financial at first our along the veracyte.com.

to Before I'd will you begin, defined that we statements statements we forward-looking make like under call remind this that laws. securities during various applicable as may include

prove the are uncertainties business we risks actual documents and we Further, uncertainties subject including To obligation and can are and that Forms better quarter. not statements under give our Veracyte's Veracyte provide or most to our files cause be they that on to you understand refer further updates and any correct. company with XX-K. Forward-looking the during will performance recent to could Exchange the and trends Securities differ, the Commission, no risks assurance to to XX-Q results the

the Reconciliation from call IR certain this earnings are section measures will directly Veracyte's In addition, comparable financial accessible measures non-GAAP of of site. financial include to measures. these GAAP most today's the included release, Web in

Stapley, to CEO. over I call Marc Veracyte's will turn now the

growth prior of board. Thanks, us outperformance even revenue and primarily results, which we were of across anticipated driven delivered $XX.X than excited million, the Shayla, I quarter We and first everyone year, our to thanks for joining Decipher. by the share very today. Afirma over better XX% am almost

to discipline, we with meaningfully flat short-term Further, cash, $XXX continued prior equivalents the seasonal cash of cash focus quarter that quarter, anticipated. and of with use million, with ahead our investments roughly financial the at even we ended projections first on the our

to test guideline growth the evidence, and approach our approach our balanced is a and test framework and this of preservation to performance clinical address penetration. reimbursement required the is securing clinical invest to enables proven need and Behind developing capital Decipher of specific that needs, market force growth identifying unmet the Afirma us sustained our drivers. and in drive inclusion behind long-term This to the

This quarter, is greater saw positive cancer, being across a both growth and evaluated XX,XXX more patients that tests our we given existing delivered we the seasonality, to anticipated, close to typical for trends We for due quarter. for thyroid than we which ordering had base first in Afirma expected impact provider. orders

reimbursement in-network On benefit making four members. secured X million contracts, health an new test the the additional payer plan over for front, we

the addition to of that addition promoter of the initiative report. best-in-class Afirma enhance to part to our tests, our Afirma the outstanding commercial to excited as I'm TERT In mutation share teams, and work recently reimbursement of with prognosis. we There as our co-occurring a have launched the testing the VXXXE TERT highlighting that of with published malignancy presence to are the several a mutation promoter variant associated as such BRAF that correlate of high poor well been recently studies risk mutations

decision-making. status hard of cancer mute as further surgery wanted, to empower such mutation -- a suspected informing DNA aggressive care, physicians or reliably clinical with that Given the to more us team patients treatment thyroid optimize insights for determine allows value promoter these or whether to our diagnose TERT gene patient is to high-quality works for assay develop the

coming Afirma's will in continue enhancements to performance such along We with streamline the that quarters. to done we've the product experience as and to this, work improve customer benefit believe the ordering

high single-digits as expect bolster Afirma year. the now first growth in we the Given rate our for strong this results, the as full well quarter for

Urology. to Turning

more the surrounding Neurological evidence this budding establish the on Annual care. Association expand the test were cancer, Real-World reinforce of of Test, men week, Test, presented Meeting encompassing a large Decipher further abstracts with XXX,XXX Prostate focusing multiple At on standard the Decipher utility than which American new data to from the particularly clinical with prostate helping our to earlier sets data exciting as tests. two continue We

among researchers favorable from use with study, had disease. first of Testing the independently risk associated In test conservative their the Decipher paid found patients a Institute increase National Cancer in with our that Prostate undergone was who those data management with database two-fold and

second Test were diagnosis metastasis, radical the recurrence linked of of score the initial demonstrate metastasis. was and XX,XXX claims of prostatectomy was to to at independently health study, predictive after predictive In both results Prostate decipher data risk over electronic biochemical Decipher and and

the of presented month to for a AUA, In utility the the that Test. data we number advance further published last Prostate studies at clinical evidence addition Decipher

with inform in published over identify study could treatment early benefit from who diagnosis. first disease European the The study help to around of treatment X,XXX Prostate of adds cohort a prostate intensification. in decision-making the in patients initial decipher growing help better Oncology Urology micrometastatic This found Decipher to evidence may those patients, use

cancer Test an published wide accurately in groups personal intermediate Additionally, International is with risk guideline a prostate select NCCN new help Phase because of and data important available. cancer. X from and heterogeneous the risk Journal study the most physicians is variety known Physics, an in the prostate more Decipher the NCI-sponsored the analysis of choose Radiation treatment Journal, appropriate can by intermediate of Red categorize Prostate as disease is all treatment deemed risk for This men risk Oncology

growth NCCN utility XX,XXX recent along team Afirma, volume as accounts. Decipher guidelines, of Building QX our from nearly our more existing higher as framework, to gene the biomarker most drivers. Decipher stellar patient the adoption population. patients good on intermediate growth also Of long-term our X by from we've risk the were is making driven ordering decipher for of in we study the firm validate expression The the Decipher Level continues for help note, of attainment with patients was lung the evidence years, strong validation a both for well, for progress XX Like led enrollment than demonstrating in volumes malignant netted test any clinical by study randomized progress the NIGHTINGALE, report first established Grid Percepta to our execution new Nasal with which with guys techs. potential to differentiated this and this potentially tests in to position, positions followed well launches. patient on noninvasive are Swab for our novel our the prostate

trial, phase the to trial the forward to month. or International look ATS patient preliminary in the We which of learn advance into Thoracic of Conference utility investigators data the on American management the to familiarity incorporate at clinical enabled presenting this test expanded Society, later how

to the United menu driver long-term another patients for The global of launch growth States Veracyte. key our outside is test

adoption delivering Our record tests, and current offering, breast IVD evidence. demonstrating to by product Prosigna quarter, traction close patients had X,XXX clinical for a supported cancer

submission the Classifier are meantime, body interstitial management impact demonstrating are predict abstract progression test to looking With continue clinical our at forward we ATS, feedback the notified to Envisia for -- now evidence December to the patients in build Genomic the presentation its of disease in the from Envisia responding European lung regulators XXXX, and we to ability within patient in to on of disease. and

preparation for international important globally, We the bolstering also expected of of our the KOL in of US, believe market submission our IVDs generation US will Europe gaining swab the the in in evidence LDT our help while menu in and nasal support for IVD. in prostate building focus expected diagnostic good permission progress We're on type drive NVIDIA making out launch XXXX to XXXX. the broader of with adoption to

headwinds of planned current our share to business We to Meeting, development offerings. and environment, abstracts While spending at were highlighting of distinctive Theater and points the pulling the of Annual multi-omic help partners the macro Spotlight along pleased we our is the biopharma given continue set on all to host over impact this our a biopharma drug three facing the course customer assets process. back sizable that advance AACR a unique significant year,

growth to to business. of fuel We the build long-term are of pipeline new out this our customers prospects continuing

As I and beyond our pipeline identify the products is our the testing expand call laid XXXX of to out to quarter, opportunities outlined. on last currently available areas menu for our I strategic focus one new

in in our investments the important shaping our globe this leader future. across these our held drive role the annual we as efforts, of the from our growth a oncology phase first future the imagine teams together day and bringing for R&D, with front pleased teams the part of April, doing next extremely are work discovery company. to to that for on As and Veracyte's I'm commercial clinical and medical, diagnostics

how highlights embedded environmental, business report This highlight world, our Before commitment ESG and the advance our are late outcomes I not dedication values earlier governance to into but this business shareholders, and transforming program. to to all demonstrates close, social to I'm and in publication inaugural only week. ESG also patient our the I'd our I'm and to our to mission our our foundation stakeholders. and like we further transparency deeply excited partners on other efforts provide pleased the build our over employees, of

the date and fantastic for a the clear quarter execution solid our by QX progress summary, team. excited In about across marked future. was to our focus We're

expectations will to financial and results for that, review for the Rebecca our now updated With turn to quarter I XXXX.

Marc. Thanks,

XX% quarter, and revenue cash with over in increase revenue, of year-over-year, strong prior period $XX.X year. Decipher Prostate total we to driven We was well $XX.X increase of said, Afirma excellent As by over in the volume Quarterly increase the an testing volume, as tests, Marc approximately an quarter. of higher-than-expected have same XX% as the grew collections million a XXXX. XX% XX,XXX another million,

from Total this approximately tests. per just than ASP been testing Adjusting for testing ASP impact, $X,XXX. was would $X,XXX XX,XXX of Testing million was have test, under volume $X slightly out-of-period collections. greater benefiting

primarily across spending previously approximately revenue X,XXX First contract product year-over-year, and million, down tests $X.X due revenue the $X.X as product other totaled was industry, XX% biopharmaceutical overall discussed. year-over-year, volume IVD lower quarter up manufacturing XX% and constraints million, and to was

mix margin exclude year-over-year, prior expenses non-GAAP year. higher to expenses, of and compared fixed volume include gross other gross from was margin approximately basis the restructuring and acquired lower stock-based Moving Non-GAAP and XX%, costs, routine margin XXX other cost the Testing and points to the intangible gross but down Biopharmaceutical compensation. long-dated XX%, prior operating Product XXX absorption. results, will points amortization acquisition-related margin was basis I up XX%, lab as was collections. does was margin gross benefiting compared given assets XX%. highlight to gross year, up which

up million, were forecasting invest non-GAAP $XX.X of expectations operating better-than-expected to gross year-over-year consolidated expenses gross Sales driven we well we are costs. by we and were Non-GAAP by as a sequential XX% higher to million. $XX.X expenses and outlook, ramping in full million development and IVD trial increased down margins expenses, margin increased $XX.X personnel $X.X of million as volume support $X.X mid-XXs. year our our marketing are excluding cost Research While step million by revenue, expenses $X.X $XX.X at as in million. reiterating clinical the and up to million G&A expenses development to

GAAP depreciation our $X.X of million ahead We expectations. stock-based Overall, and recorded million $X.X the of of $X.X ended a included compensation well net equivalents which with investments, of million, cash, we of and $XXX.X million cash amortization. loss quarter expense short-term and

Turning now guidance. XXXX to our

result $XXX mid- million a and updated decline of teens, a to million million, revenue in previous increase the of than of by strong projections quarter revenue. greater high updating $XXX previously biopharma other higher performance This million. $XXX in to and $XXX our than offset have our our expected to expectations testing guidance is revenue We first to

are the quarter. sequential we going QX quarter-over-quarter growth in to increase seasonality For the year, summer the QX, holidays finishing remainder forecasting and XXXX fourth into decline in in the before revenue typical the of with given

equivalents Moving and short-term cash to our expectations investments. for cash,

to proud acquisition-related comments always, anticipate potential consideration. of impact XXXX $XXX As am M&A. plans we on million, we are deliver of balance In year-end now maintaining and how of look financial projections. I continuing barring contingent even to and our XXXX, prior approximately XXXX forward started cash the our our with

the call. the open of go portion line. Q&A please into the now We'll Operator,

the you. will we Thank Souda conduct from of SVB [Operator of Securities. Instructions] line comes At Puneet time, question-and-answer the session. Our this question first

now is line Your open.

Great. Thanks.

Rebecca, question. Marc, for the thanks So taking

congrats beat really Afirma, and raise. say here first the on and on guide So solid the I'd

force about more talk talk you just product. the what What's or little -- could data? modeling driving talk through maybe strength that a lower bit So, year, we conversations little go that a what as strength optimization that push Is just higher what's could about in high-single-digit little could Afirma. the the Is the if year? for around And sales to bit driving can there? a us the little bit product? as it Maybe you're a it bit you a

product Thanks the Puneet. Afirma for of strong performance Thanks, recognizing and Yes. the the team. Afirma

the pretty engaging the I'd I product all think commercial with strong of but the really kind mostly continued above much it's that mentioned, physicians. by execution, of say, enhancements and the driven and you ordering of in it's process

there, A TERT the launch in think I and in product launched the have with out is least them. always who too, really of visiting feels well. give it are utility evidence that there are visiting it talking the way. some the further sales clinical good feels real the that example physicians, of publications competitive we've Afirma quarter enhancement benefits do like that and some recently an test, about well, a tailwinds we And enables lot anecdotally, our to dynamics including data as at as more around of There got of customers, TERT credit I in of team, there's to

has So, far. about very been how excited so going Afirma

add I always be to terms We're provider that to be think any physician different, dynamics. But those and of physicians. could within growth of to adoption In one think the competitive potential current of we're kind continuing drivers I for broaden basis. rate continuing new

way, we're And in keep competitive would want We team. to to extent the so that always why product add? to be the you to there's incremental -- we the that just Again, share up. can sales and that's that go our investing drive other dynamics helpful able Anything take too.

Nothing, it you covered well.

or obtain or just from you is That's in term the Got a pairs pricing then what the TERT this long-term? on commercial And great. it. one quick near the can here mutation, change LCD

all necessarily. Thanks, intents not take that purposes is answer Puneet. The for I'll Yes. one. and

associated patients. subsection TERT at code. necessarily will So there of in point for with time, code a isn't And there pricing a be while ordered this is that

We'll are is we enhancement price list way of the it's small so don't if the we be that continued will and the wouldn't of but covered. we're the meaningful in this patients for Again, impact being are successful ensure doing -- successful work getting $XXX we're to time which given why with once range, benefits for over once to it's for materially expect one we obviously getting this patients those we think product. or once and covered a in very for, the primarily we're And critically. successful contracted other, to impact getting even TERT that patients -- percentage on ASP, TERT even price, ordered, important a but of which lives will have ASP

outcome. what TERT X% yeah, said, just But it's to undergoing small are success we but essentially And of to a the than that that, that, That Yeah. for to cases of X% Rebecca be that mean important nodules to to thyroid I order molecular add have. only testing would subset have mutations, expected more right? promoter as

then biotech challenge revenue And just somewhat biotech me funding, this last the sense. macro be and funding for continues as situation in on reflected Make well. obviously, a and biopharma the to quarter one

context imagining maybe the talk year? the full to year of just is of for within biopharma? What be about the for guide So we level down should step you. the us through Thank moderation for the what the

But number of is concentrated several seeing we A, we of called then with our a potential a and as have in we biopharma large remember, think mean, a this fairly think for pretty revenue. truly early I position Yes. small accounting headwind, portion customers were again, I ago something a quarters out I that.

one factor. that's So

very very in versus And clinical I biopharma the early impacted we're clinical -- that early products. of work, research all much across which in is, involved the existing we're think, and on-market trials area ongoing most is

there. our And that. feeling are it making the concentrated. we're at customer making But we So we're our one well, good portfolio progress of to of diversify been has remain still brunt fairly we goals I -- doing think that

small other It's of Biopharma percentage than revenue. suggests that's is roughly more around and biopharma just that. cue half of our going over. a slightly very XX%, is A

fairly a little change. a translates obviously, so to And there, movement big and here percentage

And earlier. updated we've just high bit, Puneet, help cited year little guidance to math updated as We mid of a give single revenue given the testing of with to you Afirma digits an the for growth high-teens.

We the continue expect to mid-teens. do to business around product

is back your solve line. so and other And obviously, biopharma that

to close get that with math. should you pretty So it

it. Got works. That

Thanks Okay. both.

Thank you.

you. Thank for One our moment question. next

Inc. of comes Stephens, next of line Carrico question Our the from Mason

Your line open. is now

and question bump or reps strong probably how growth Maybe somewhat it's on within Hey rate, to but responsive market? quick adding of thinking adding a thyroid linear up simple, I few really just promotionally about potentially guys. performance. reps a Congrats is franchise? Is quarter, growth, the know forward this relationship here, not there are repetitions you how that could thyroid a going your the

business. we've a been years for in of lot the thyroid this And at Yeah.

So a an And there's their with adding optimal as you and good territories as a when experience you teams. very simple between start have point course, territories accounts. commercial there. existing rep, have we've disruption where of lot redesign you some adding and reps, to reps reallocate and got it's to of that creates and always And you get relationships that not

don't grow of it And the so grow we we're we that significantly have to that getting. achieve always team, in ourselves ask kind continued we to but have to order results

have and is -- and a another lot reason what about customers good to sales talk to sales visit conversation. go the is having matters and a with reps customer their a think what really and I reps effectiveness

talk be addition of turn patient case, another it's they the turn and the it's and physician while to about on. good and again, it So it when ordered order example, every what wouldn't go out means and reason -- to a so should it in again,

just our customers. reps of communication on and the and customers And a their that of So sales then existing it. firm over to strong part street, routine good, cadence being converting finding big new out a new between is obviously, customers

been As we've you of product, lot over ordering when be just physicians this total a customers aren't XX% who test about talked there, firm, molecular from the investment out sales some at a is avoided the have in to easy penetrated. should before, yield testing going diagnostic terms of that the it surgeries testing, conversation, There's fairly should a be visiting look lot accounts. this number takes and but out thanks of in actually of team those a and it thyroid about

And add to specialty continue as be channel. headcount is types to adding need build which the benefits rate oncology over served marketing and the of XXX are leverage and the markets so, sales do are physicians. growing, it, expect that we would revenue while adding here, only thing So nearly the Mason, just seeing we're we're of not with, is at of that, XX, growth line to XX serve to immense I is sales same and to forces These the call one heads don't different can sales you right?

we're sales result really marketing. really are and model the we and like and as generation leverage through getting a a position from differentiated So, of cash cash this the obviously benefiting

Got it. That's helpful. Prostate. Decipher maybe Thank you. on And

like a something room at to like lot that. covered run think seems XXX checked, million Still of I there. there's lives, last like I you're

You guys lot a publishing of have studies. been

coverage on you're thoughts updated your get how wins just thinking I forward? or that could going about potential So

Yes. Yes.

key well much not it, As get. surprising supporting there's are out, some guidelines, a than lack it far It's as there of that test so peer-reviewed you still that there There can we is publications, Level that long. X well more to little NCCN penetrated use XX take at the evidence is got And there. the a you room is trying. -- least that quite it's here about when rightly of out so you've a think this for lot reasonably very of need test coverages pointed

with decision. -- of lot And do. team we a order a is they have are they're this to access working drive payers coverage what in the that market There

it. the to more just still for of you -- firm keep tailwinds still one to come been we're That's XX, getting, coverage We're today, the the in future. have and in XX as on what market, cases. So, driving got that we on driving that here years, and future has commercial now we some a opportunities XX heard just years,

a it's in to we core do part have So you know. of diagnostics, what as

we're growth did -- Mason, we little me. very Afirma on necessarily it a quarter Afirma, with Decipher has the And I majority price favorable to mid-XXs the well. happy Decipher vast expecting -- majority but of was in mid-XXs quite with volume add added volume I the ASP it, the already I'm as was and grew this different. volume But shared, vast think, as growth for of Decipher I -- the no said meant Afirma be come Decipher, call, bit in earnings the I pricing from and a last not to Thanks the I it there grew in mid-XXs, volume. bearing as the mean bit but growth would came from little sorry, a

good. All questions. Appreciate guys. the taking you Thanks

you. Thank

Thank you.

of Our next Matt comes question from Sachs. Goldman Sykes

open. line is Your

Maybe, a out I of well. congrats taking Rebecca, I the know increase. to up start performance bit the this just questions was good for my Obviously, on Hi, quarter. there afternoon. an and as OpEx revenues were wanted side. on Thanks the

OpEx should had standpoint mentioned this ramping development just IVD You quarter. But an expect what we clinical from trials.

of You the us gave give the course just year? kind for but a guide, that, margin can sense kind trends this you OpEx of below of gross sort of over

the as R&D heavily also but of And Swab. investing the of prepared in cited to. if for IVD came we're good benefit from Nasal remarks. you Yes, growth, look happy And not NIGHTINGALE only our at chunk study the a in in we that year-over-year increased obviously, development,

year. growth of will OpEx the of R&D trend We XXXX. for expect largest continue growth course course sequential to the of the R&D growth over that to contributor the be throughout

marketing throughout grow year, the not I materially expected As is and if earlier, anything. that sales to mentioned

course coming expect albeit rate slightly, scale much leverage of incremental less with we're us. seeing, And at to a we years, great systems infrastructure of that's growth G&A we rate the the the of to R&D. source especially as growth invest again, on volume the ensuring the G&A line, -- over a really and will facilities so grow And in for and than

Got it. And to have on then on comments you asked for volume and been questions follow-up or that just the maybe Decipher number. thank of some

think just you wondering, March had the penetration still your presentation, around Just rate I in XX%.

So, I volume assume that's sort update probably product given pretty the that with consistent But with where of growth? maybe where competitive traction you're landscape just the we seeing sort most and of are you're any there that today. just seeing on the

of Yes. of incidence remember, think growing. a the is, is talked as One prostate here. at about cancer couple last And I we factors play time,

that that's partially You to be was And the can growth. whole it driving larger. see market X% around

In terms of our end of last the XX% penetration, rough year. that at was the math

everybody gives as tough to numbers, and when not hard it's So, tell. update you that to not

represents when say, I well But share the that overall mentioned, -- Rebecca and certainly share like mid-XXs the grew It this gains to as just would quarter-over-quarter. feels clearly, market. taking continuing as in as growing take some share we're business

in just on remind in remarks, if IVDs. ask your just about Got one me for Because but ramp clarification the could think you question. the just I it. I last, talked Europe And prepared

could or maybe it me a bit obviously better? than Prostate, Prosigna. outline You Envisia, period, Decipher you sort help Percepta time just XXXX-XXXX little have of that Is in like

Yeah.

starting this close with actually so there Prosigna, which then is mentioned which on we're far news. so the ahead so comments for And is dealing And with will a the process with today there. still well X,XXX which question. expected and -- swab the little to record you've a to on and that IVDR in beginning how go they'll we tested a going part the good notified In from yeah, very the submitted of XXXX, is So a and test last and We're untried approved of for the We're and Envisia, through quarter, great and we growth to I point. year, is XXXX, call, at in in as talked about and product, process, as the actually prostate going market in had quarter decipher in a that the review give quarter be of the going normal submit year, back submit us is we December schedule. thanks to of that forth response got a the is time what submit this and process. which right body, nasal we're timing can't similar sense and then still And when there. I

that Great. it, up. Thanks appreciate for congrats clearing I And Mark. again.

All right. next One Thank you. moment question. for our

next question of Brackmann of William comes Andrew the Our line from Blair.

Your line is open.

around just a NIGHTINGALE already, taking finish should later enrollment track it could thank this or And A thinking asked if afternoon. the for Can time about study lot we readout? maybe us potential Good Hi. And on a of reiterate been has to how questions. you you remind but sort line for I just do is be year? Thanks. housekeeping here. question

to NIGHTINGALE, in And in sites. those of of year And up contracting pull and enroll and end the going an starting nice our last expecting there. has good uptick team job really been the patients excellent trial. question some with yes, sites, the done new those here we're the to patient of in progress for clinical to starting Thanks around has see actually, through still terms signing getting Yeah. the the

on as that's we're about for we In we I few to can conversations use how here before, because at talked a clinical the there's utility that -- variability a reimbursement how think of I've to clearly, some that readout, much the the bites analysis. analysis. going And take to terms in lot of appropriate results looking of the apple well where short-term will drive terms of depend

takes that pursuing reimbursement possible there reimbursement. and to time. is got as So drives order time, data takes said we've also published, ultimately, couple -- then But there's in quickly which the move clinical as as that conversation, we're of we've a pathways the get which to utility before, to

a effectively able just one longest there through the be the hope we do be would required follow-up two guidelines and before that the early years. And follow-up to follow-up is that up Yeah. But to we'll we be go thing a shorter to point add would two-year that. readout publication to or than

Rebecca, got question then for And Thanks. you. I've modeling a boring Okay.

bit mentioned just think Can you maybe margin. little around you sequential gross give driving that? color down I the step in Thanks. what's a more

be to. happy I'd Absolutely.

fixed on So side at absorption, both the But of well flowing were testing this as our line. the the the of benefit overhead with obviously, of overall, labor pleased especially and we and mix million gross this the margin period margin as gross cost higher benefit we did collections $X from very quarter, XXX%. down benefit quarter, really

impact business of not If absorption that the coming have not forward period of have so that collections, we sustainable will lean basis in you headwind be model. A you benefit been hundred running a with we with prior incredibly from necessarily the cited, that and will sequentially. majority a is couple look of labor the lab. sequential And points the

lab, impact to increased we're the we to gross we will to also ability on continue have to seeing, basis. -- up ensure volume are a so, levels be staff going sequential ensure in the And margins which to will to grow at

into expanding are the In here San our we growth that, addition take Decipher to of franchise. in the to laboratory Diego account

incremental taking see will margins. also that the will be impact buying We on All instruments. space. We'll

even the in solid in good obviously, a a But invest to that because bit we a a pretty And growing faster had mid-XXs margin is new expected. end, story we're need one. we little it's than So, growth.

it sequential we're And seeing. all day step so take down, the slight though even it's a for long I'll growth

to hear. Great Thanks. Okay.

question. for moment our One you. next Thank

comes of from Mike question Company. next Our & Needham Matson

is line open. Your

on is Hi on Maybe question This Mike. guys. Joseph another Afirma. for

you testing? introduced, uptick added. when when, with sales from that was Atlas did test. force looking of Maybe been a Now have from or And ordered or has interest guess, Xpression maybe similar you terms large But is probably forward you. the maybe was add-on what and physicians guess ordered productivity, thing will in going [ph] that teratessin that you? new of Xpression kind be lot a expecting assuming Thank in a Atlas your to see back introduced more. I I'm I

to look able gives wouldn't on sale. of The a really it's is have of would speaking which actually we're product. sales I the I really our -- to. of of good the to genomics Afirma, important you earlier, to to have some at group the Yes. go for the reason the as it's physician And physician Teri physicians And readout a includes provide it we're it products, it straightforward it's just a as that very a box, making as some blended testing, same point. and so the said this and I as enhancements this because more patients more I’d is, [indiscernible] to the check kind say third way But with the team Afirma our salesperson about product a No, that would conversation thing. now, as includes well the about the of at a conversation important done

to able as to continuously need think enhance but be on physicians drive, look necessarily insights terms incremental patterns the its the product they own, I it significant that Rebecca in make just to and helps the to what ordering patients. of to sales for earlier, deliver sure wouldn't providing said we're I

on Okay. a Thanks on the color that. for Maybe question encounter.

without at whether machines these institutions where maybe numbers, looking into looking labs in hospital pharma. getting Europe, the labs, the Just are that versus clinical academic or installed just or base, installed, maybe

the same maybe have on you split and for installed question the an base? the US idea If there

I base. think of installed the about in -- terms of it I the don't really nature think

I is here, the about get encounter menu, to we -- country obviously we go have approval the reimbursement. regulatory go go get test to a have if by -- to add to which country drive approval, new you once think the for to we we to regulatory strategy Europe, if even have we think the

decision And in you've drive country, got go by lab then once you placements. the to lab that reimbursement

really the be flow-through be going menu the Now in driven by it placements to labs. of last, facilities. It's those could could clinical in in patients and the be academic, smaller

really not platform, to to the base have order to strategy. installed need And -- the And the instruments because menu do also have on that, so new about the to we drive hence it's we're to current and that. in going place

country, that's well. I about country the way terms So it focus and the by it, think of US including going in as to more in important on

are the I is, the say, It of -- Prosigna the majority thing The revenue is obviously add US. vast only US. Yes. would would we selling in outside I actually is

I think markets. out those that is to where we put the develop majority of US our investment

something mind. in So to keep just

Yes.

one. one Okay. makes just last That And then sense. maybe

your any well I but prepared some has IVD maybe guys do. trial clinical here earlier In stage that you're had database the or guys pullback biopharma databases? of there mentioned terms you that you that only the of seeing revenue, Maybe been Has GRID remarks in some as how from of guess, the or in start you development licensing as services not Decipher trended and that XXXX in as services effect revenue terms the, from other XXXX of

Yes.

outside which little is of a impact of revenue our HalioDx a the US kind reminder, a our is biopharma is of side. related immuno-oncology There seeing it revenue that the US. stems the the in maybe majority of itself businesses. acquisition. is is Veracyte immuno-oncology decline we're the Just Europe that But business, on lot the And of from coming Decipher also of associated with the majority former bit from

impact. see we're bit you're very that that's where development where to so biomarker And effect. early that's the And likely more a seeing in involved the that's work

activity. read-through yes, So There's that. biggest the in no, But a of I say Decipher interest in wouldn't I'd driver. GRID-related lot say there's that's terms no there of the

the you questions. much Okay. very Great. for Makes Thank taking sense.

question. One for you. next our moment Thank

Okay.

of the Tejas next question of line from Savant Morgan comes Our Stanley.

is now line Your open.

Greetings. guys. Hi,

for simple you, of there’s zeroing the that terms you're the out -- fair maybe out-of-period quarter, So a you impact one essentially talk the that those out the year? Rebecca. to called about in it guide Is in of I'll collections assume rest for it real here in the $X million first

Yes, that's fair.

Mark, out know called on -- you to pulling I on are that that or of sort in will offering opportunity? sort a the of then, But and biopharma. key make big terms you picture for you help step spend, are years missing one traction cetera. participate of really your it so, et any pieces And next of Perfect. in back look Okay. the customers here better sort sort of three as sizable sites more in the up substantively there

are. a of Yes. that believe Atlas, because is that. the interesting our that -- developing biggest are It's a But we're question. those. we I there demand for think great the market And biopharma there which really there's extent working to on don't

And on, that's going the business. so that's because what we're growth one is things working to of this revenue we drive think in

RNA or of I what we today. most have they Proteins mean, need But in custom have be, have assays that. Immunohistochemistry of versions multiple assays, whether we I we we think or expression-based

we in We and also DNA, have Marseille that here. in can do lab our

the got of and of is work. got course, what's Atlas capabilities AI a lot we've So capabilities which the we top of on that, behind plus,

in, environment. more side got So we've of on the selling just got people. assays. need We more those customers the got bring success We've in the biopharma got capabilities. and the drive current the macro We've We've lab. the to

would lasts not. a don't next years, for that the I I conversation. expect That's environment three difficult hope macro that certainly more current

-- some get We're we're bearish of right that how business the So little out. to guide this a now, we've on being trends traction, seen. see more bit the of in we'll and our that pans side we're starting given

to And important then is can mean Europeans, you I it? you decide do then are within control can I obviously, on do to of it lines country sort accelerate terms XXXX largely that's Is time the the control. a the of to time out Got reimbursement anything in it. particularly and pull you your marc, for there -- But sense. itself approval anything the your lines submission. prostate forward? pointed by think nCounter to of Makes Menu, the submission in

timeline No, has for in the substantially. it mean, pulled been. original to looked already series. -- at it happening pulled of It's platform. relative the through on We not it all forward I these that we products

they an make. in and parallel, but were on at think Envisia on Percepta. don't to start then point development. I work We Decipher happening that's three stages work different start then important All just of been on have work

Decipher the very So we've progress next to progressing platform or of the to that. We're there. and nCounter the made bridge moving good stage work been over the has well,

can very do detailed making review body not go that as and to as really that's on So much and notified we can The important we sure to current things and it's our a going speed do. with we it up plan most what fast roadmap, the dossier. is submit can go thorough and is thing

doing be. a process us. some Envisia always like giving that It's new is kind would of under we're from on what us pilot of for the new be we thought might that it notified body -- of used way work sense The the and IVDR what it the to for looking this is that notified different be

got in regulatory XX process this, doing but the new, Our as you years experience team has is know. of

who's anyone so, learnings submitted. body there's, notified and of for lot And the a

So smoother. that bit a and should help it hopefully see Decipher so little long make

Decipher of this -- patients accordingly, are we drives the and for there in the the outside we that and the have at extensive end bodies in test the is Europe. to that notified because can thing U.S. other point test U.S. And this The need evidence the that hopefully,

So, we yeah, more that, as going to on will can. but come go we're as fast

final That's me helpful. And via perhaps the in setting MRD, talked cash in sort the in for M&A, et the Metastatic the of away Got cetera. then, you've mean, past, on to Marc, from so staying one space, cancer or in screening it. speak, about one I even either strugglers

the I in M&A gotten a assuming little Is pipeline? better line following seller banking that the the as red I'm has you opportunities bit of for willingness here about mean, a sort crisis. obviously, you think regional

sort off terms dabble of of that space, philosophically. how see about we, limits is you of So at in in sort you some just it point, could that or think

our change around I’m in no seeing M&A. currently philosophy

we open it I've high obviously that the We'll keep things very, So bar our is to to eyes before, be very said for opportunities. blind make us. not sense, but we'll

people heavy lot healthy care not doing it's looking that area a In continuum itself, significantly yes, of investment. that, screening because there's we're and a to terms of enter necessarily the

right But and patient, going our been the where the to with are in to way dealing as suspected that's as sweet cancer, always patients spot, as you've or continue focus. patients all across continuum, you're having once a us far of identified that's care see cancer who

Thank the Fair time. guys. Appreciate you, Enough.

our for moment One you. question. next Thank

Our Sung next Scotiabank. Nam of from question comes Ji

line open. Your is

taking to laboratories for questions. do the Thanks model adopted? to know How tell, being playing this once it's for there think work, for see Hi. you market the do I if question that think One to too IVD you or that you early -- just Marc, but see test nCounter platform, adopt be don't on have opportunities tests your do on you will out? you one would strategy. more multiple

of we to actually it's [ph], having drive have, do question, mean, extent to a rare said we're extensive way, mean, if building. need we've right Envisia adoption, disease. menu the along, you that's is I -- think and an which I more an Definitely because breast all test about this you it what a

if steps you indications, to really swab adding the that And think needle. move So where starts nasal the I top adoption demand, really don't significant that get are own. potential on that, use think about population, much more cases the up its the than necessarily Prostate significant into. significant pent-up of disease, on then, you

to some well, get breast today. it's makes placement where a easier it. those said we with seeing Having today. that, to conversations having very just much cancer and Prosigna have the menu menu point the that are small you it traction, test take drive the just But to to extensive and is That albeit going

one for then cash for you guidance for the year. flow Got And Thank it. the Rebecca.

it. missed I Sorry,

activities launches be potentially Sorry, if commercial pipeline or upcoming the there associated development use initiatives any was cash I any could with drive if kind wondering next of missed next might year, but I of that any it, year. accelerated

enough Fair Sung Ji. question,

for budgeting our year. We haven't exercise gotten next into

share discuss. cash with one know balance is I generation. any best that in we're time said, to do being So and to That it's Marc philosophy point investment same to and premature at our where I the going

the Overall, focusing in quarter or may year, or any balancing on way given tip those And will. scale so, one any you we're sides, we're slightly while other. the two given -- if absolutely

but budgeted philosophy think haven't overall that's we that day-in, by given anything, we to yet, committing not So abide I day-out. the

Yes.

add I think IVD our or Afirma we're the evident about that everybody talking development. evidence something that the strategy, to or think whether fuels is to that, Envisia, and generation, business, Decipher drives really adoption I of [indiscernible] I'd or evidence

evidence in development NIGHTINGALE to this somewhat so the for we're always for Decipher, invest nasal more investing US. be swab. investing heavily in going year, we're driving business We And and evidence to our outside in IVD

there's will And able affordability the that that, we is to extent that, we to our do that the continue we be so that studies to sure to within and make business. the feel and do evidence fund said drive the parameters really development helping

you so Great. much. Thank

Sung Ji. Thanks,

question. for our moment One you. next Thank

Raymond the next of line Our James. comes from of Cooper Andrew question

open. Your now line is

Hey, lot question. asked. been everybody. A has the for Thanks

more of of the on cost one things. the just maybe of margin side So sort side things,

incremental of Can you about in one you you bit add personnel give made, a the in heads heads some seeing and kind side that you're R&D, little you be of of some sales costs. costs look sense measured us a of may talked just wage hit versus wage helpful. of inflation sense on the labor you, much starting environment a really is kind is what away? would How to hiring there out just the for and be to maybe as more and terms marketing In heads

a of happy say, Yeah, so. do it's I both. little would bit to

environment account. the we set wage On did take into budget this that year, side, inflationary for the merit we our when given

would years. that materially And it not I would versus so say, so -- elevated, point. one be I was And prior though would slightly so

is from. a The a where we across are and operating relatively think that's point from think as well so And as return get other we lines, areas adding I both in perspective evident the doing we'll laboratory than I heads the meaningful the obviously tax and impact first you in have as thing, benefit more your third reset, which obviously well. that always our quarter, OpEx you your the in quarter see figures so others, and and benefit does say resets first would

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investment to at And are forecast end our happy think are, think -- quite time. where where are I for really ending XXXX, from we a this prudent. So we cash point in I levels we're cash ending forecasting with

it certainly grow from would levels, placed I great little than And to people talent and we we're a company, finding say really our most and environment before, very better standpoint, was a trouble really having at recently. lot some join some good hiring and

be be So able to hiring it's nice to now. right

us yourself from from Great. manufacturing internally? changed bit that a down efforts the anything the transition last And some detail on then through be the NanoString more What more being to there continuing are about progress you the one or surprises, give me. the has year? update front guideposts any been of and some little just the in terms made on on from has should of Can of we And that that thinking front?

the progressing year. this well No, done team France transition as we activity and to nothing at continuing new. of to the that is that to and in is It's the planned had over end idea our have

that. to so to do track on we're be And able

day in, type time. this point day And I at of this out in wouldn't expect, a I thing is mean,

done. You updates probably until won't get meaningful it's

will. So good no news, is news you if

Yes.

stop quarter, we'll Well, nice Great. I Okay. there. appreciate it. and

Thanks.

concludes to to back portion. it All like Q&A remarks. right. turn now closing Marc much. This so Stapley would I you Thank the for

Thanks, I it. appreciate Stephen.

testing both access Afirma Decipher very wrap efforts business. to quarter drive up, obviously, see a to Europe on product core and just and So for market with of in performance first I'm quarter in the strong expectations. good our the our pleased exceeding And our adoption our with business

our commercial be IVD focus for which is development, fueling new cancer Swab Nasal enhancements in and really will we're the menu. further Our that such product supplemented our growth lung markets, the of excellence evidence by business, long-term global in products on and our developing as the

the proud work of Veracyte the the patients doing all team over great world. is really for entire I'm

thank I'd you. like say to So with that,

Ladies call and us. gentlemen, you this today. Thank for our concludes joining

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