Okay much better. All right, we'll go ahead and get started. I'm Puneet Souda. I cover life science tools and diagnostics here at Leerink. Welcome everyone. Good morning. Rebecca Chambers joining us from Veracyte, CFO at Veracyte. Rebecca, pleasure to have you at our conference. It's been wonderful, and you could make it. Thank you. Yeah. My pleasure to be here. Thank you for having us. We're thrilled. Great. It's a gorgeous day. Great. A lot, you know, a lot to cover in terms of just Decipher, Afirma, a number of things. Maybe, you know, Decipher as a product, if when I look back, has absolutely been in the driver's seat from the time of the acquisition, solid franchise, a lot of clinical evidence that you have built up over the years and continue to do so. One of the focus that I've seen with, you and Mark as well has been a focus on profitable growth. Maybe, you know, yes, you have new products coming in, but you have trimmed other products. I mean, you've Prosigna, TruMRD, and other products, but they're not material yet. You've trimmed other products. Maybe just help us, you know, sort of take a minute and tell us how should we view Veracyte growth and focus on profitability versus the peer diagnostic companies that sometimes focus on TAM expansions or growth and more, you know, obviously more OpEx as a result? Yeah, absolutely. Happy to answer that. Before I do, just want to refer everyone to our safe harbor. Our comments today will be covered by that safe harbor, and it can be found at veracyte.com in the investor relations section. With that, absolutely. Thank you for recognizing the focus because it does all come down to focus. Puneet Souda is absolutely correct. Since we joined the company back in 2021, we've taken a portfolio approach in making some hard decisions around products that we didn't necessarily view a strong return to be associated with them. As such, we trimmed the portfolio of products in development to really focus on those with a high ROI. Those effectively blended itself to Afirma in Decipher, with investments in a pipeline which is now starting to bear out. Our goal here as we sit in 2026 is to effectively optimize revenue growth, while also continuing to deliver a strong cash balance and cash generation and a strong P&L. Effectively, as we think about it, we are absolutely keen to keep a 25% Adjusted EBITDA margin. With that incremental investment in the business is very nicely profitable, really invested to drive the pipeline and drive revenue growth. That is resulting in two products this year, Prosigna, which will be launched here over the summer, and our first demonstration of our MRD platform in muscle-invasive bladder cancer. those are going to be two great demonstrations of our Veracyte Diagnostics Platform that effectively really kind of looks at things differently, and whole data approach to drive that revenue growth, drive the clinical evidence, drive the acceptance, the adoption, reimbursement, and all the wonderful things that come with that. really the aim is obviously a great financial profile, both at the top and, you know, profitability line, but also to serve as many patients as we can, which is what we get up every day for. Got it. That's great. Let's talk about Decipher, which is, obviously, you know, number one driver for you and 20% growth that, I think in volume. Mm-hmm ... you're targeting and even higher potentially with maybe some ASP improvement. We can talk about that more later in terms of overall revenue growth. And Afirma, I believe grew like 12% compared to that. You know, when you think about the tailwinds to growth, NCCN, metastatic, GRID, assay enhancements, all of those things, maybe can you help us understand, you know, sort of rank order them and how should we think about the primary drivers of that and what really keeps it sort of the sustained growth rate in terms of, you know, just the performance that you're seeing in the market, 20% is still for a product like this in the marketplace is strong. Quite. Yeah. Yeah. Absolutely. I mean, Decipher really is a best-in-class product, and it's not just the test, which is obviously has both prognostic and predictive value that is quite immense. It is also the fact that, again, we do a whole transcriptome, and that whole transcriptome engages the KOL community through the GRID offering, and that effectively drives the body of evidence. If anything, it is that body of evidence through the Veracyte Diagnostics Platform that effectively is driving growth. You know, the way that manifests itself is through podium presentations, publications, and we have over 100 publications now on Decipher that translates to guidelines. We're the only genetic classifier in guidelines, and it also translates into coverage and utilization. With having the entirety of the risk continuum. Mm spanned now incredibly strong data at that across the risk continuum, we really. You know, it's hard to rank order is effectively. Yeah ... what I'm saying because- Mm-hmm ... it's an and. As I sit here in 2026, what I'm most personally excited for is kind of the penetration into the high-risk portion of the. Mm-hmm ... the risk continuum. We had amazing data at ASTRO last year that really demonstrated PAM50, PTEN, and PORTOS were critical predictive classifiers. Those predictive classifiers will be taken from the GRID report and put into. Mm-hmm ... the clinical report this year, that is going to only enhance that portion of the offering for the high risk and metastatic and BCR area of the curve. You know, I think that is critical. The other thing that is driving growth is growth in docs, right? Mm-hmm. We had 18% growth in docs in the fourth quarter, and that is obviously, you know, critically important as we go on. Unfortunately, incidence growth is around 6% expected to be this year, and we're gaining share. We're gaining share from the other two players in the market. If you did force me to stack order rank them, it would first be, you know, penetration across the risk continuum, share and incidence. The penetration is around, you know, 40% or so when we look at the overall market. You know, again, sort of that begs the question, as you pointed out, new prescriber growth, NCCN, what's, you know, what's the way to think about sort of more what drives a more sort of stable, predictable growth going forward? One could imagine that at this level of penetration, you should have visibility into that more longer term. How should we think about Decipher? You know, is this a mid-teens product or could it continue to do better? Yeah. I mean, obviously, our guide this year. Mm-hmm ... it can continue to do better, and we are focused on unit volume growth more so than the growth rate, right? Mm-hmm. We do think that Decipher can deliver double-digit company growth for the foreseeable future, and obviously are augmented by the other new products coming. We feel like we're in a very strong revenue growth position. Decipher has grown more than 20% for 15 quarters in a row. Right. I think, you know, where we are now, there's still plenty of room. There's still plenty of white space. We'll get to Oncotype and why this might change in the future. Mm-hmm. Today, Oncotype is a great predicate. I believe they have over 85% of the market. Yeah. There's no reason, given the body of evidence we have behind us across the entirety of the care continuum. Mm-hmm the risk continuum, sorry, that we can't get there, and we're well on our way. Got it. We saw one of the competitors put up a higher growth than before. Has the competitive landscape, has that changed in your view? Obviously, that product was struggling before that. Mm-hmm. They're growing. Maybe some of it is comps, you could say. Yeah. Some of it is just better improvement, execution. Any change in the competitive landscape? Absolutely not. Mm-hmm. I mean, last quarter, we, you know, we more than outshined their growth rate. Mm-hmm ... on the Decipher piece, growing, you know, volume in the low 20s% and revenue in the high 20s%. No, I do think they admitted on the call that it was an easy comp. Mm-hmm. I think it was a couple of years of an easy comp. Mm-hmm. You know, I think that there's three players in this portion of the market, and from what we see in the field, you know, the other two might change, a couple thousand samples of share here or there. We're demonstrating, you know, that's kind of in the noise for our growth rate. I mean, we grew over 22,000 tests last year. I think that's, you know, maybe just shy... Mm-hmm of their total volume. Got it. Yeah. You know, just keeping on Decipher a bit more, digital pathology, you talked about that, I think 210,000 slides on the last quarter call. 150,000 patients, there. Maybe just walk us through what you're trying to accomplish there, how that should enhance Decipher... Mm-hmm Obviously, you know, AI is the talked about word. Just any efforts there or utilization of AI. What are you trying to accomplish? Yeah. Yeah. Let me break it down. Yeah ... the two pieces. On the DPAI front, we take the same approach, whether it's DPAI or PTEN, PORTOS, PAM50 signatures. Mm-hmm. The first thing we do is we follow the science. Our engagement with the KOL community is incredibly strong, and that engagement effectively allows us to offer things through the GRID report and validate them accordingly. When I say we're following what we did with PTEN and PORTOS, et cetera, it's exactly that. We are offering DPAI through GRID, and over time, when, you know, the KOL community believes that it is robust enough to be moved to the clinical report, we'll do so. We're not going to, you know, we're not going to push the science. Well, I'm sorry. We are pushing the science through that community. Mm-hmm. You know, I think there are definitely, portions of the DPAI market that have proven to be complementary in nature and not necessarily replacements. Mm-hmm ... the Decipher test. You know, in the spirit of that complementarity, we will continue to go down that approach. You know, I do think that it's an interesting, an interesting area. I definitely think it can enhance things like Gleason score. Mm-hmm. I do not think it will be able to, at least in the near term, classify patients to the way that Decipher does. The reason for that is effectively because most of the DPAI offerings today are based on clinical factors. Mm-hmm. by training these algorithms on clinical factors. Mm-hmm ... you're enhancing their performance for clinical factors- Mm-hmm ... but you're not enhancing their performance for reclassifying risk of patients, if that makes sense. moving to the AI front- Mm-hmm ... you know, since buying the C2i asset. Mm-hmm ... we've had quite a strategic initiative around AI. Mm-hmm. Obviously, DPAI is part of it. The other thing we are just doing is ensuring that we have the infrastructure to really utilize the extreme wealth of data that we have, whether it's the 210,000 prostate sample scans that we have, whether it's the hundreds of thousands of transcriptomes we have for thyroid and prostate, or if it's just an incremental slide coming through the lab. We're scanning everything. Mm-hmm. We're building these incredibly robust databases built with real-world evidence tied to them. This strategic initiative won't end with prostate and thyroid. It will be moved into MRD. Mm-hmm. The interesting thing, and I know we'll get there on MRD, is we're doing whole genome. We're going to have, you know, an incredibly large database of whole genome sequences that measure the longitudinal drift of the genome over time as we see different treatment modalities, as we see different responses, et cetera. The thought is over the next five years, we don't know how we're going to be able to benefit from those things today, but we're setting ourselves up to be incredibly strong from a data angle on the MMAI front. You know, we're excited to see where it goes. It's not a line in the spreadsheet. Mm-hmm. Right? It's not in the LRP. It shouldn't be in the LRP. Mm-hmm. It's, you know, no one knows how this information could be used, and the wealth of data that we're setting up is quite astronomical. maybe just briefly on ASP for Decipher... Yes. you know, what opportunities do you see to grow the ASP there? Obviously, this is a, you know, it's a well-covered test already. Mm-hmm. Just trying to understand, you know, how should we think about the ASP expansion? Yeah. Absolutely. The guide implies 20%-ish revenue growth. Mm-hmm. We do have a large prior period comp. We don't guide to prior periods, in the guide, volume growth is above revenue growth. If you take a step back and you say, "Okay, what is Decipher ASP going to do over the next five years?" There's room, that's great. We have 215 million covered lives today. Our average reimbursement rate or our average ASP compared to the Medicare rates in the mid-70s, it's pretty strong, to your point. Afirma, as a proxy, is in the low-80s, we do think there's still room over the next five years to gain 300-500 basis points of ASP growth. Now, in any given year, I wouldn't sign up for that because you know as well as I that. Mm-hmm. -payers don't tell you when they're gonna make these types of decisions. Mm-hmm. We are in the tail of small payers. It's kind of in the long tail of small payers to go to get from that $215 to the $280 that Afirma's at. There's a lot of opportunity and, you know, I do think, ex prior periods, we'll see those gains over the next three to five years. Got it. Let's switch to Afirma. This is talking about penetration, this market is, you know, over 65% penetrated across all competitors. The market overall is growing low single digit. Mm-hmm. You've guided to mid-single digit to high single digit this year. Mm-hmm. You know, how should we think about, just given the level of penetration here, what keeps this product winning and expanding in this space? Is it simply because, I mean, the product I followed this product for many years and it's interesting that it's actually, you know, growing above the market even at current penetrations, yeah. Yeah. I mean, for those that are unaware, Afirma was launched in 2011 and I believe got Medicare reimbursement in 2013. long in the tooth- Mm. -is a good descriptor. you know, we are growing this product quite nicely. In 2025, it grew 12%, and in 2026, we're guiding to mid to high single digit growth. While you're absolutely right. Mm. The market is relatively penetrated, that penetration, it is also a more bifurcated market than Decipher across three different competitors. If the last, we had around 52% share in 2024, where we will continue to grow is by gaining share. Bethesda III and IV is pretty well penetrated, I would say above the market penetration, share gains will be critical there. Five and six, we'll be taking the same playbook that we just talked about with PORTOS and PTEN. Mm. through Afirma GRID and really trying to work with KOLs to get classifiers that push the utility for those two portions of the thyroid market higher. I would boil it down to share, incidents, new signatures eventually over, call it again, that five-year timeframe. Mm-hmm. to get to the five and six. We will get to the transcriptome, the new transcriptome... Yeah. No result rate, benefit in 2026. At the low end of the guide, there's no benefit in the guide. At the high end, there's 2 percentage points of gains from the no result rate in the new transcriptome. yeah, I'm glad you brought up transcriptome because, maybe if you can take a minute about in this product at this point, you know, one is no result rate which you're improving. Yep. How should we think about the overall, you know, gross margin benefit? Then maybe just about, you know, in terms of the product here, you know, sort of what was behind it in terms of, okay, we need to move to a transcriptome. Is it more, you know? What is bringing about that gross margin improvement? Is it more automation, chemistry change? Yeah. What is it? What are some of the factors? Absolutely. For those of you who are newer to the story, the Afirma assay has been on the NextSeq 500 since, call it, the late 2018, 2019 timeframe. What the new transcriptome is, it's moving, porting it to the NovaSeq X. Mm-hmm. Obviously that comes with a benefit of lower sequencing costs, taking advantage of today's technology. Not the vast majority, but the majority of the gross margin benefit is from the actual lowering of sequencing costs. Sure. What we also are benefiting from, though, is the amount of RNA required is lower. Mm-hmm. Mm-hmm. Mm-hmm. The lower RNA input for this test is what's allowing us to return more results to patients. So that is where you're getting that no result rate benefit to volume growth of around, you know, 0%-2%. We went through the transition beginning in September of this year, really fully got all volume onto the new transcriptome as of January 1, 2026. We'll see how it all shakes out in terms of what the actual benefit is, what the cost reduction is. Q4 as a proxy, it's beating our internal business case models to justify the investment in transforming from an older technology to the new technology, all the validation and development work associated with it. We're quite excited. We're excited 'cause more patients are gonna get the answer they deserve. We're excited because we're reinvesting those dollars to drive incremental revenue growth drivers around MRD, Prosigna, and other things. We were estimating around, you know, 250-270 basis points, gross margin expansion, but just wondering if you can provide any thoughts on, like, once this is fully through, sort of what. Yeah ... how much contribution you can see? Yeah. I'd like to hold off for a couple more quarters- Mm-hmm. Mm-hmm. Mm-hmm. ... because I don't wanna get overly excited, if you will. One quarter doesn't make a trend. The fourth quarter was quite strong, even ex PPCs, we put up an incredibly strong testing gross margin. You know, the guide implies that strength, you know, continues. Mm-hmm. Really, you know, whether it's 74%- 75% gross margins on testing, it's all getting reinvested back into driving that top line and ensuring patients get the test they need. Got it. Just 1 point on Afirma GRID you pointed out. How does that drive revenue? I mean, it seems Mm-hmm ... though it's more of an RUO collaboration product. Mm-hmm. Just trying to understand how does that add- Yeah. Yeah. It doesn't drive revenue. Mm-hmm. It drives KOL engagement. One of the ways we are taking share, and thanks for double-clicking on it, one of the ways we are taking share is by gaining more traction in the academic community. Historically, one of the competitors has had more of the foothold in the academic community because it came out of UPMC. With GRID, we are changing the narrative from being a commercially oriented organization in that community to being a research-oriented. Effectively, the way that allows us to gain share is by engaging that portion of the community on understanding the underlying biology of thyroid disease, what classifiers are important. It is absolutely RUO, so definitely no revenue, but it does encourage collaboration, engagement, publications, and then those kind of second derivative impacts are what allows us to gain that share. Got it. Then just a similar question on ASP for Afirma. Yep. You know, how should we think about the growth there? I would think this would be flat, again, yeah, just, what the conversations with the payers? Yeah. Where can you see the improvement? Does GRID help? Yeah. GRID doesn't help on ASP. Okay I would say Afirma is already best in class on ASP, right? Yeah. We're in the low 80s. We have 280% of Medicare reimbursement rate on Afirma. We have $280 million covered lives, as I mentioned previously. Here, it's very small, very small steps. I do think We had a headwind over the course of 2025. Mm-hmm ... on ASP, with the exception of Q4. For me in 2026, it's more about the normalization of that headwind than it is about strong incremental growth. Total company ASP will absolutely gain strides-. Mm-hmm ... but it'll primarily be driven by Decipher. Got it. Okay. maybe switching gears just brief, before I get into MRD and the new product. just on EBITDA margin, I mean, 25% EBITDA margin that you're guiding for the year. Mm-hmm. That's in line with long-term guide. You know, when excluding the true-up, it is a step down from your 26% prior margins. Maybe just walk us through what are the factors where you're increasing in investments, and how should we think about any uplift here? I mean, what could be the factors that drive the upside versus still landing at 25%? Yeah. I think taking it back to the first question- Mm-hmm you asked, Puneet. Yeah ... really our goal is to optimize the P&L. That starts with revenue growth, right? Effectively, we're keeping, we're budgeting to that 25% to try and aim to optimize your revenue growth contribution. As we look forward, we are investing quite heavily in new growth drivers, some of which you know, some of which you don't know, right? Really, when it comes down to it, our incremental margins would be immensely higher than 25% if we let it all flow. In any given quarter, we may, because oftentimes, you know, given Prior Period Collections, primarily, you don't know what's gonna flow and what's not. In any given quarter, we may deliver more than 25%, just like we did in the fourth quarter. We really manage this on a full year basis. That's not going to change. Effectively, tailwinds, headwinds, I can't think of many headwinds. From a tailwind perspective, we obviously finalized the SAS entity last year, and so that will be a tailwind. The transcriptome will be a tailwind. Mm-hmm. Fixed cost leverage will be a tailwind. We are investing very heavily in the Prosigna launch, less so on the commercial side, more so on the development side. The MRD platform, clinical product, less so on commercial. We have a long tail of what we call tier one projects, all of which are product in nature at this point that, you know, we will launch over the next period of time to really drive incremental pen revenue growth. Yeah. Look, and thanks for that. Coming back to the question, what, a number of companies in this sector tried to do is they obviously are chasing larger TAMs potential, products that are, you know, maybe going to go and take share. Let's just start with Prosigna first. Mm-hmm ... if we could. This product is going into a well-established competitor market. You gave an example early on with Oncotype. you know, there's a standard of care there. Maybe just help us understand how are you thinking about positioning this product? Yeah. How should we think about the potential share that you can do take in this market? Prosigna is a breast classifier for HER2 positive patients. There's around 225,000 each and every year here in the United States. Oncotype is the best-in-class product. There was data presented at ESMO last year, ESMO Breast, that effectively was a head-to-head between Prosigna, Oncotype, and the Agendia test, MammaPrint, and effectively OPTIMA chose Prosigna. Prosigna is in the main prospective OPTIMA trial. This trial started in 2019, I believe, and effectively is the whole point of it is to demonstrate that patients effectively Prosigna appropriately classifies them. It was chosen over Oncotype because Oncotype under-called one in five patients. That is an important data point as we go and we market this test. OPTIMA, this incredibly important trial, will be reading out, at an upcoming scientific conference, most likely ASCO, assuming the investigator, you know, hits the timelines that we're up against here. You know, let's make that assumption. From there, you know, we'll have to see what the data says, but we're hopeful that Prosigna appropriately classifies each and every patient, and that's going to be pretty critical, for both the evidence- Mm-hmm ... the guidelines, et cetera. Then from there, we're going to take the Decipher playbook and play it out. Mm-hmm. This is a five-year trade. It's not a one-year or two-year trade. We'll start with the KOLs. We'll continue to build the evidence. We'll hopefully have, on the back of OPTIMA, hopefully we'll have a Level 1A evidence. You know, it's not just about one study, it's really about the body of evidence, and it's about the podiums, right, and trying to gain that mind share. That's what we'll be doing for the next couple of years to build the foundation before we kind of broaden out to the more community-based oncologists. We're excited. We're very excited. You know, we have varying degrees of excitement on the team from excited to insanely excited. Mm-hmm. You know, I'm gonna keep it at excited, 'cause that's the CFO's job. You know, I think when it comes down to it- Yeah we're gonna have to wait and see what the data says here in a couple of months. This, it's not material this year, but can it be material next year? I think it's all about your definition of material. It's not in the guide this year, right? We don't have price yet. Mm-hmm ... we'll be putting in a tech assessment soon. I would hope that next year, let's not use the word material, but I would hope next year your confidence is, you know, you have the confidence that this, we could take meaningful share. All right. You're starting to build that confidence. Got it. Okay. lastly, on MRD, if we could. Yeah That's a product that, obviously, you know, number of competitors in the marketplace. There's a leading competitor. Mm-hmm ... that is well-established product. You're going in with muscle-invasive bladder cancer. Maybe just tell us, you know, how do you win in this marketplace positioning and also maybe touch on the cost of the assay itself and how you're, you know, how are you thinking about the pricing overall? Yeah. I mean, hats off to Natera. They've done an amazing job in this market. You know, I don't wanna sit here and say we're gonna win across the entirety of the market 'cause that's not the strategy. The strategy is to play in very specific areas, right? MIBC is the first. What we have in MIBC is we have a channel that we can synergize. We have a classifier, so we can work across the care continuum. We do have a more expensive test, but we think we also have a better test because of the benefits of having whole genome sequencing behind it. Mm-hmm. Whether that's how much blood, turnaround time, all of those things, it'll take two years to prove them out. Again, going back to the data I mentioned, you know. Mm-hmm this is all in the back of that data strategy, in ensuring we really have the most complete whole genome sequence repertoire, if you will, to lean on over the next five years. We chose MIBC for the benefits of the channel that we have. We are not, you know, going to go head-to-head in colorectal or something like that in the near term. Mm-hmm because it's just doesn't behoove us, right? It's not where we have our strengths. We'll be very strategic on what we launch and where we launch. We'll wanna be in markets where the whole genome does play to, you know, different things, whether it's the pharma piece, whether it is, you know. I'll just leave it at the pharma piece. Then I think from there, you know, we will broaden out with an indication, that really kind of are also similar areas vis-à-vis, you know. Mm-hmm where we have some strengths versus the competition. On the cost side, whole genome sequencing is expensive, right? It's not as expensive as it was 10 years, and it's not as cheap as it will be in 10 years. There's a lot of competition, and we're looking at all the different platforms. We have a roadmap to take the cost down quite dramatically over the next five years. You know, we believe this can get to a 25% Adjusted EBITDA at scale, or we wouldn't be doing it. It's not gonna be there from the get-go. Also, you know, MIBC has 85% Medicare population, so the reimbursement is gonna be quite strong from the get-go. You know, I think it's a balance of all of those things where we think we can do quite well in this market. I think importantly, just one thing to get out there is, we will be going for the post-radical cystectomy portion of the bladder cancer market, the MIBC market. Our conversations with MolDX are about a landmark reimbursement price and a subsequent test reimbursement price, and it's not about the bundle because those patients that are in the urology portion of the market do not currently have cancer and therefore are not under the NCD. That's the portion of the patient population where our channel is strongest, and so that's where we're gonna be focusing. You know, we think we're gonna be successful. 2026 is all about laying the foundation. 27 and beyond is about growing. Got it. Okay. Well, we're out of time. Thank you, Rebecca. Thank you, Puneet. Thanks for joining us here. Lovely to see you. Okay. All right. Thanks. Thank you all. Thanks, everyone.