Good morning. I'm Tycho Peterson from the Life Science Team. It's my pleasure to introduce Rebecca from Veracyte. Welcome. Thank you, Tycho. Maybe just a quick recap on the first quarter, as we think about you raised testing revenue by $10 million at the midpoint. Just talk a little bit about confidence and durability of what you're seeing right now. Yeah, absolutely. Morning, everybody. Thanks for being here. Before we get started, I would like to remind you of our safe harbor, which can be found at veracyte.com. The goal of that is to cover anything we say today. With that, let's move on. Yes, we had an incredibly strong first quarter. The fundamentals of the business, as you can see by the guidance that we raised after those results, remain incredibly strong. In the first quarter, we delivered double-digit revenue growth for Afirma, benefiting from our new transcriptome, which I'm sure we'll get into. Also, incredibly strong Decipher growth, growing in the high 20s. Those results are really fundamentals to the kind of the data strategy of Veracyte and the differentiation of our assets, which I know we'll also get into. Additionally, we delivered a 31% EBITDA number, and that came through both because of prior period collections, no result rate underspend, and really when it comes down to it, just an amazing demonstration of the profitability of our organization and our underlying business. As we look to the rest of the year, we're quite excited, not just because of the great results of the OPTIMA study, which we'll get into here shortly, but also just because of the core franchises are performing incredibly well. We will benefit from the Afirma no result rate, 200-300 basis points over the course of the year. As a result, we updated our guidance for that to high to low double-digit growth. We also expect Decipher to grow just around over 20%, and that is revenue growth because there is a headwind on the prior period collection from a ASP comp perspective, so volume will be higher than revenue. All in all, where we are today is we have two great franchises growing incredibly nicely, we have an incredibly profitable business, and we have two new growth drivers that are ready to get going here. One launched three days ago now, one will launch next Monday, I'm sure we'll get into those. We're in an incredibly fortunate position with an incredibly strong balance sheet. Yeah, life's good. Great. One or two financial ones, we'll jump into the launches. Maybe just on the EBITDA margins. Yep 31% you talked about, I guess, how are you thinking about balancing reinvestment of these profits into the upcoming launches? Yeah. The long-term target had been 25%, you're obviously well above that. Yeah. Our guide for the year is that we'll deliver more than 26%, and we obviously delivered an incredibly strong Q1 figure. We banked some of that in the raised guide, and some of it will be reinvested throughout the rest of the year. Philosophically, we manage to that 25% and budget to that 25% in any given year. Given the incrementals of this business, that really allows us a nice investment portfolio to reinvest into the organic business and deliver things like the Prosigna launch and deliver the TrueMRD asset. I think we have the ability to have our cake and eat it too, and that's really a unique differentiation in this industry. I think it's an and in my mind, right? Again, we have the ability to invest in these new product launches. We have a long tail of incredibly interesting projects beyond just these new two product launches. Given the incrementals of the business, we have the ability to deliver that 25% EBITDA in any given year, we manage to it. That has been the result of from day one, Marc just hit his five-year anniversary earlier this week. We have very strategically and actively managed the portfolio, and that has put us in this position. It took a couple of years to play out, we shut down five different tests, an entire channel, an entire country, that is what has allowed us to be here today. Those weren't necessarily easy decisions, they were decisions that were done with math in mind and the level of investment and the return on that investment. I think we are in a very fortunate profitability perspective today, and it hasn't come at the expense of growth. Strong cash position, just under $440 million. Suffice to say you're not looking at M&A right now. You're happy with the portfolio, or how do you think about inorganic? Yeah, I find it to be a huge call option that we have available to us. We are investing organically in the business as much as we feel like we can manage. Even with that investment, we are dropping an immense amount of cash. We generated $120 million last year. That allows us to be incredibly disciplined and active on the M&A front. You wouldn't know it because we've only done one acquisition over the last four years or five years. Each and every year, we probably take six or seven actively to further conversations. They either fail because of we are very diligent about maintaining our investment thesis, and if it doesn't hit one of the investment thesis kind of bullets, if you will, then we pull back. We've looked at a number of different things. We have a team that I run that is actively doing so, that looks at things across three vectors, the first being indications, the second being the continuum, and the third being both geography and technology platforms, so maybe four. Can't add this morning or count. When it comes down to it, there's a lot out there. There's a lot of interesting things out there, but there's often a valuation gap and/or it's just not core to our data strategy. That's so it also has to fit that kind of portion of the story as well. What I mean by that is effectively it needs to be a whole-transcriptome, whole genome, whole something- that could add to the layer of data that we've been creating, and that's obviously been very impactful in getting our products to where they are. Last one on the quarter, just ASP improvement up 3%. Yeah. You mentioned prior period collections. Just remind us the ASP outlook for the year? How much of this is mix versus pricing improvements? Yeah. The 3% is organic pricing improvements. Decipher was up 400 basis points ex- PPCs, and Afirma was up 200 basis points ex- PPCs, and then we had $4 million equally split on top of that. We did a number of different projects last year behind the scenes to really enhance our ASP performance. Those levels, not necessarily the growth, but the levels that we saw in the first quarter we believe are sustainable. On the Decipher side, there is material room to go. I think I don't necessarily count on that in any given year, nor do we necessarily guide to it in any given year, and we definitely don't guide to PPC ex what's already been booked. We have a good long-term tailwind on ASP on Decipher. We're at around 215 million covered lives right now. On Afirma, we're at 275. There is a lot of room between here and there. It's just a bit of a slog. We won't commit in any given year to ASP improvement, but when it comes down to it, we expect to get that higher rate over a three- to five-year period, and you'll see increments in any given period as they come in. It's just hard to tell the timing. Let's shift over to ASCO. Yeah Obviously the OPTIMA data for Prosigna, I guess. How has that been received? How do we think about the path to NCCN guidelines? I wasn't actually at the conference. A number of our colleagues were. I haven't seen the team this excited about anything in an incredibly long time. We're a relatively even keel team, but you get a British man excited and it's something to be seen. I would say we all had high hopes for OPTIMA. We had high hopes for the data, and I would say this easily has surpassed the best hope. Investors came up to us at the Blair Conference over the last couple of days saying, "I talked to this KOL, and he says this is practice-changing." That was folks coming to us as opposed to us necessarily saying it back. We obviously heard similar things. The headline that two out of three women don't need chemo in the ER-positive, HR-negative post premenopausal space is insane. The challenges that women face who do go through the chemo regimen, and doing something to them like that unnecessarily just I think is practice-changing. We expect the publication to be submitted here shortly. It's not necessarily the timing isn't in our control because it's not our study, it's UCL's study. Once that is published, we are hopeful that the guideline body will meet shortly thereafter off cycle and put guidelines out. We can't control it's probably the guideline bodies meet in July, so it would probably have to be off cycle. At this time next year if we don't have guidelines, or over the summer next year if we don't have guidelines, I think we would be surprised. I guess, do you believe level 1 evidence is sufficient for a preferred status recommendation? I think we'll see. I don't want to prepromise anything. We already have Prognostic Level 1A guidance in the guidelines. This is the predictive claim. We've just put up Simon Criteria Level 1A guidance. We would hope that we are at least on par with the other competing tests, but that's at their discretion. I think you've mentioned a measured approach to building a dedicated breast cancer sales channel. Given the readout, just talk about targeted headcount. We were saying 10 to 12 heads over the course of this year, and we'll play it by ear. If the demand is there, we'll add to that faster. We can easily absorb and reallocate investment to maintain our EBITDA guidance and still do so in a way that allows us to bring on additional heads. We have an active cohort of KPIs we're tracking, and if the demand is there and we can hire the talent, we're not going to compromise on talent. We will go a little bit faster. I think at this point, 10 is a fair assumption for exiting the year. Just how do you think about market penetration, U.S. breast cancer genomic testing? I think it's 85%-90% penetrated. Yep. How do you think about displacing incumbents? Yeah. We're taking a top-down approach from KOLs. I think a lot of that volume is actually done in the community center. We're going to be using the Decipher playbook here, and that Decipher playbook effectively says lead with the data. The data is obviously great from OPTIMA, but once you have a GRID assay as well to continuously develop and deliver incremental information, and incremental studies, and understanding, and elucidation of the disease of breast cancer, you're going to eventually win the entirety of the market, right? That's exactly what we've done with Decipher. Decipher was third to market, and today it has the leading share because of the over 125 publications that were all, not all, but many, enabled by doing the whole transcriptome, and developing GRID and delivering that whole transcriptomic information via GRID. This is going to be no different, right? I think when it comes down to it, the error bars are wide at this point. We will, by the end of the second quarter, have three to four weeks, three weeks of data. By the end of the third quarter, we'll have obviously a couple of months of data. I think we have shown the ability to come from behind, and we've also shown the ability to put out data that allows us to take share. What the slope of that curve is, I think it's too early to say, but I think we're confident over a multi-year period that we'll be able to be successful here. I think from a competitive standpoint, there's distractions in the market as well, and that's something that we're cognizant of. The trial included premenopausal women and more diverse ethnic populations than you've seen in prior landmark studies. I guess, how do these specific patient sub-cohorts feature in the marketing and clinical adoption discussion? Yeah. We believe the 225 is the market and is the patient population appropriate for our test. We will not be going in with a beachhead and then trying to expand from there. We're going in with a list and Prosigna is absolutely the best test for all of your patients from the KOL approach down. That will be the message. From a premenopausal perspective, we have to give the investigators credit. I was floored when I learned this. I assumed that they had come up with the chemo suppression angle of the trial post-TAILORx. What I learned was they actually came up with it in early 2009. The trial design was forward-thinking, to say the least. The fact that they have elucidated the impact of ovarian suppression versus chemo in this trial, I think is incredibly groundbreaking and for premenopausal women. Obviously that's going to be part of the talking points, but it won't necessarily be a "beachhead," quote-unquote. We'll be going after the entirety of the market, and I think there are plenty of studies about the strength of Prosigna across each of the subcategories that we'll be able to be successful over a multi-year period doing so. Then maybe just rounding it out on ASCO, you had the ENZAMET for Decipher- Yeah to predict treatment benefits with chemo and metastatic hormone-sensitive patients. Just talk a little bit about the data you had there. Yeah. ENZAMET was for the metastatic population. It was another strong result. You may recall that for Decipher, we have been growing quite nicely in the high-risk RP metastatic and biochemical recurrence population. This is another data point for that. ENZAMET is effectively the third study that we have in the metastatic population, all of which are phase I-B in nature. There are different necessarily prediction algorithms, if you will, for different drug combinations. We don't today have metastatic guidelines. We are hopeful that between these three studies, we will get there. That's up to the committee. ENZAMET is just another study effectively talking about triplet therapy and ensuring that Decipher elucidates whether or not triplet therapy is beneficial to certain patients, and that is the most common treatment regimen at this point in time in metastatic, and we didn't necessarily have that triplet therapy conversation or elucidation previously. This is an important study for the way patients are treated today in the U.S. versus STAMPEDE, which was much more a European-focused treatment paradigm. Do you see this impacting volumes in the metastatic hormone-sensitive population? Yeah. In general, this is a flywheel, and that flywheel, every little piece of data helps. There's nothing that is, with the exception of maybe an active surveillance Level 1A type study, these are incremental in nature, and we've seen 30-ish% growth in that kind of high-risk BCR RP metastatic population for the last couple of quarters, really since ASTRO of last year. I think this is just another piece of incremental data that will allow us to continue to have really nice growth in that population, which is meaningfully underserved with the Decipher test today. Maybe just stepping back and thinking about Decipher overall, I think you've noted it's about a third penetrated in the market. Where do you see the significant near-term headroom in capturing the remaining two-thirds of the market? Yeah. I think it's high-risk, that high-risk category inclusive of the others, as well as low-risk. Intermediate is about 60% of our tests today, the other two categories are around 20. The penetration is highest in intermediate and lowest in those other two. With this data and other data that will be presented later throughout the year, I think we have a great continued ability to grow in that high-risk bucket. Hopefully, more meaningfully than the average of Decipher growth. We have been enrolling clinical studies on the active surveillance/low-risk side now for, I don't know, eight, nine, 10 years, which we'll read out in 2028, 2029, and that's going to be exciting and hopefully Level 1A to get more active in the low-risk population. I think our whole strategy here that the data comes out and expands the market for us and really allows us to penetrate will be playing out over the next three to five years. I think we will continue to penetrate intermediate, high risk. There's a ton of low-hanging fruit and low risk. There's a good opportunity. It's more crowded of the areas with other competitors. Again, we're doing great in that area. We have data coming that will just really put us another leg above the peer set. Can you maybe just touch on Decipher GRID, how you're using real-world data and digital pathology? I think you've got over 350,000 images. Yeah. How are these being embedded and moving beyond just purely transcriptomic signatures? Yeah. In general, our strategy with GRID is to do a whole X, right? Whole-transcriptome in the case of Decipher, report out on the classifier, that classifier, in the case of Decipher, again, only uses 22 genes of the entirety of the whole-transcriptome. Other signatures are being delivered on an RUO basis, when those other signatures have enough clinical data and clinical utility behind them, we move them from the GRID report, again, RUO in nature, to the clinical report. We are doing that right now with PORTOS, PAM50, and PTEN. Effectively, this is the exact same strategy that we will use with DPAI. You're absolutely right. We actually have 365 today images scanned, which is an incredible wealth of data. We can through, tokening, effectively get real-world data into that and come up with a number of different interesting use cases for that. From the DPI front, we are effectively going to follow the same path as what we did with PTEN, PORTOS, and PAM50. Deliver it. Right now, it's being delivered in bulk GRID to certain KOLs. It'll eventually get on the report. Once it's on the report, there'll be signatures, then we will get it into the clinical factors proper report. I think when it comes down to it on DPI, what we're seeing, either through the competitive tests or even our own efforts, is really that this is enhancing the accuracy of clinical factors more so than really driving incremental information around the risk classification of disease. Right? I think one of the unique items about Decipher is that it doesn't take into account clinical factors. The lack of clinical factors effectively is important because it gives you a true nature of the genomic classification of disease, which is why with Decipher, we risk-categorize patients a third of the time from the lowest category. When you get to something like an improved cribriform or improved Gleason score, that's helpful, but it's not necessarily predictive or prognostic. I think when it comes down to it, the science still needs to play out pretty actively on the DPAI front, such that it will help elucidate those clinical factors. I think it's a really long time, if ever, to actually impact the classification of disease above and beyond the clinical factors. Maybe just can you touch on bladder? It's been featured in some recent clinical presentations. Penetration still lags behind prostate. What does it take to turn around the commercial traction there? That's a really nice way to say it. Lags behind. There is no penetration. Fair enough. That's by design, because again, we've been waiting for the science to play out, and the science started playing out really over the last four to six quarters and will become incrementally more important over the next four quarters. I think when we get to 2028, we'll be talking a lot more about bladder, because it's such an active space. There's 65,000 non-muscle invasive, 20,000 muscle invasive. This is a non-muscle invasive classifier. There are many critical clinical questions that are not necessarily being answered today in bladder. Those clinical questions, again, we're elucidating through the data strategy, and I'm known as the one who's constantly pushing for bladder internally. I'm pretty excited about it. It can be leveraging our current channel. I think it really helps us with MRD as well, right? We're going to own the care continuum across the board here in bladder. This is one of the pieces to that puzzle. We're on our way, but it's not 2027. It's more a 2028 factor. Maybe just shifting over to Afirma. You grew 12%, right? That's pretty impressive for a product that's been on the market 15 years. Just talk a little- Yeah bit about where are these continued share gains coming from in the thyroid nodule market, and what are you guiding for growth for the remainder of the year? Yeah. To take the latter part, we're guiding high single to low double digits, that includes 200-300 basis points of benefit from the no result rate. That is something that we saw 400 basis points of benefit from in the first quarter. The reason why there's a delta there between those two figures is twofold. First is there's a Q4 comp. We saw some benefit in Q4 of last year, not a full 400 basis points, but low single digits. RNA degrades more in the summer. These samples can sit in hot temperatures. We're hopeful that we can maintain the 400 basis points throughout the next two quarters, but probably unlikely. I think when it comes down to it, we're seeing the benefit of the transcriptome, and we're seeing incidence growth in the low single digits, and the delta between that and what we're putting up is share gains. Those share gains have come from a couple of different things. One, a couple of years ago, we launched GRID for Afirma, and that has really changed our positioning with the academic customers to be much more research-friendly. That positioning and the benefit of the information being provided to the research community through the research RUO-only report and furthering the understanding of thyroid disease management with thyroid nodule management, has really helped our conversations with customers. Again, GRID isn't necessarily driving the volume. I don't want to say that. I'm just saying that the interest in the academic piece of the research is. I think when it comes down to it, we are gaining share from the other two players in the market. One has more of a challenging financial situation, and then the other, I think, is being run by Sonic at this point, and we're also in litigation with them around IP. I think today we have a pretty good position via continuous improvement with GRID, et cetera. It's really a combination of share from those two players that's making up that delta. I guess with V2 transcriptome, you talked about the no result rate, and I think that adds 2% to 3% of the growth, but maybe just talk about how that translates to the bottom line. Nicely. Yeah. I think before we get to the bottom line, it translates to a result for patients. Right. This is 2% to 3% of our volume that we weren't necessarily able to give a result back on for patients, and I can't imagine how frustrating that would have been. I think first and foremost, we're excited about trying to get that critical information to more patients. Secondarily, it's benefited revenue. The costs were already in the COGS line, and so effectively that flows down 100%. You've seen a meaningful gross margin benefit, not only from the no result rate, but even more because we have lowered our sequencing cost materially from the old transcriptome to the new. We were on the old NextSeq. You're taking a 2015 sequencing cost structure to a 2026 sequencing cost structure. That's been fun. It's allowed us, and when we've talked about active portfolio management when we started, that's one of the levers that we pulled to allow us to deliver that 26% adjusted EBITDA while investing heavily in these other growth drivers. Maybe just hitting on TrueMRD in the launch. You launched with MolDX coverage for recurrence monitoring. Just break down the portion of your targeted urology channel? Yeah you focused on initially. Yeah. Our Decipher channel serves radiation oncologists and urologists primarily. In the recurrence setting, we believe about 70% of the patients are being managed by that channel and will be effectively available to us. They aren't necessarily physicians that are actively using MRD, though, there's a lot of education that will be had. We believe the whole genome approach will prove out over time to be the most interesting in many diseases, MIBC being one. Again, 70% of patients that have undergone curative intent need to be monitored are in the urology setting, again, this is something we'll be putting into the bag for this Decipher team to really go after, I think we'll be successful. There is competition in bladder, the competition is amazing and does a great job. Not trying to say anything, but they're being seen in the med onc portion of the market, which is that other 30%. You've talked about owning the tissue block as a real advantage. How much friction does this remove from the ordering process for the urologists, and does it create a lock-in effect against the competition? I wouldn't call it a lock-in effect. I think there are things that we can do over the next three to five years to own the tissue block from the get-go. Those are things that we will continue to do and focus on. I think owning the channel, and having those relationships with the pathologists in that channel to make sure we're easily gaining access to the tissue is critical. Just thinking on the competitive front, Natera's obviously built a presence in MIBC- Yep at the IMvigor011 data that paved the way for a companion diagnostic label. How do you think about the commercial weight of a competitor with an FDA CDx label? Hats off to them. They've done a fabulous job. Again, they're in that medical oncology channel, and they aren't necessarily seen as frequently in the urology channel. The IMvigor011 study is absolutely for monitoring or surveillance of treatment effect. Right now it's apples and oranges between the two tests in terms of where we are and where they are. I think the IMvigor011 study is really a rising tide for all boats, because it has elevated the use of MRD in this population. I think we're excited for them. I think this can be a multiple-player category given the size of it, and so hats off to them, and I think we'll also be quite successful. For you guys, is it all about capturing newly diagnosed patients, or is there any clinical reason for physicians to switch existing patients that may be on Signatera over to TrueMRD? Yeah, I would actually turn it around a little bit and say if we're there from the get-go, at the point of diagnosis and owning the tissue block from that point, to your earlier point, we can own it across. That patient is managed for the vast majority of time in the urology setting. They only go to the med onc setting for actually when they're delivering a chemo or adjuvant treatment. I think it's actually more like why would you go from having a Decipher/Veracyte-based engagement to a Natera-based engagement and then back, right? I think that this is why the whole care continuum strategy is so critical across NMIBC and MIBC. MIBC, I couldn't get it out. When it comes down to it, I think, we will own channels in my mind, and so the role of the med onc, especially in the urology channel, is going to be more why would you switch and then switch back, if you will, as we get through time. We're just starting the launch here, and we are handling this launch with kid gloves. This is more of a three- to five-year conversation in my mind in terms of owning that entirety of the continuum. We talked about margins at a corporate level, but how do you think about the COGS profile here with whole genome and serial plasma draws? Maybe just in the interest of time, also comments on expectations for Medicare crosswalk pricing? Yeah. On the Medicare crosswalk pricing, or I would say in the Medicare, effectively the equitable pricing model, we aren't expecting anything incremental. Obviously if it came through, it would be great. I think when it comes down to it, sequencing costs are a large part of our cost basis for MRD, that's okay because sequencing costs are going one direction. We have an entire cost-down roadmap over the next three to five years that gets us to a place where we think we can hit the 25% adjusted EBITDA for this business. It's not going to be from the get-go, it's something we're going to have to manage in that 25% budget target each and every year. Given 85% of this population is Medicare in nature, we feel relatively confident, unless expectations vastly exceed our plans, that we'll be able to manage that 25% EBITDA. In time, as we execute that cost-down roadmap, gain commercial coverage, and especially because this is all going through the urology channel, we will absolutely get there.