SEC Form 10-Q filed by Veracyte Inc.

5/6/26 8:07:30 AM ET

$VCYT

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Health Care

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-36156

VERACYTE, INC.

(Exact name of registrant as specified in its charter)

Delaware

20-5455398

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

6000 Shoreline Court, Suite 300

South San Francisco, California 94080

(Address of principal executive offices, zip code)

(650) 243-6300

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value, $0.001 per share

VCYT

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐

No x

As of May 1, 2026, there were 79,792,647 shares of common stock, par value $0.001 per share, outstanding.

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VERACYTE, INC.

INDEX


						Page No.
PART I. — FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)						1
Condensed Consolidated Balance Sheets as of March 3 1 , 202 6 and December 31, 202 5						1
Condensed Consolidated Statements of Operations for the Three Month Periods Ended March 3 1 , 202 6 and 202 5						2
Condensed Consolidated Statements of Comprehensive Income for the Three Month Periods Ended March 3 1 , 202 6 and 202 5						3
Condensed Consolidated Statements of Stockholders' Equity for the Three Month Periods Ended March 3 1 , 202 6 and 202 5						4
Condensed Consolidated Statements of Cash Flows for the Three Month Periods Ended March 3 1 , 202 6 and 202 5						5
Notes to Condensed Consolidated Financial Statements						6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations						18
Item 3. Quantitative and Qualitative Disclosures About Market Risk						27
Item 4. Controls and Procedures						28
PART II. — OTHER INFORMATION
Item 1. Legal Proceedings						29
Item 1A. Risk Factors						29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds						29
Item 3. Defaults Upon Senior Securities						29
Item 4. Mine Safety Disclosures						29
Item 5. Other Information						29
Item 6. Exhibits						30
SIGNATURES						31

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VERACYTE, INC.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or this report, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this report other than statements of historical fact, including statements concerning our business strategy and plans, future operating results and financial position, as well as our objectives and expectations for our future operations, are forward-looking statements.

In some cases, you can identify forward-looking statements by such terminology as “believe,” “may,” “will,” “potentially,” “expect,” “estimate,” “continue,” “ongoing,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect” or the negative of these terms or similar expressions that convey uncertainty of future events or outcomes, although not all forward-looking statements contain these words. These are statements that relate to future events and include, but are not limited to, statements about:

•the factors that may impact our financial results;

•our expectations regarding total revenue and total test volume;

•our expectations with respect to our future research and development, general and administrative and selling and marketing expenses and the anticipated uses of our funds;

•the impact of macroeconomic conditions, including inflation, volatile interest rates and foreign exchange fluctuations; geopolitical developments, including regional and global conflicts, such as the ongoing conflict in the Middle East and the war in Ukraine; and government actions, including evolving policies and legislation, tariffs, energy, trade and supply chain disruptions, and market volatility resulting from the above on our business;

•our expectations regarding the Percepta Nasal Swab classifier for early lung cancer classification and the Prosigna breast cancer test as a laboratory developed test, or LDT;

•our expectations regarding the launch of the TrueMRD platform and the addition of minimal residual detection capabilities to our diagnostics platform;

•our expectations regarding the timing and success of our transition to offering more of our tests as in vitro diagnostic, or IVD, tests on multiple platforms worldwide;

•our ability to continue to receive quality reagents and other raw materials from certain single-source suppliers;

•our ability to develop and launch tests, and enter into supply agreements, with manufacturers of alternative systems;

•our expectations regarding our partnerships and agreements;

•our expectations regarding capital expenditures, our anticipated cash needs and our estimates regarding our capital requirements and profitability;

•our business strategy and our ability to execute on our strategy;

•our ability to obtain and maintain Medicare, other government payer, and other commercial third-party payer reimbursement at acceptable levels and our expectations regarding the timing of reimbursement and changes or implementation of government regulations or reimbursement policies;

•our expectations with regard to the estimated number of patients eligible for our tests and the attributes and potential benefits of our tests and any future tests we may develop to patients, physicians, and payers;

•our expectations on our ability to drive demand for and reimbursement of our tests;

•our sales, marketing and distribution capabilities and strategy;

•our intellectual property position;

•the impact of government laws and regulations, policies, guidance agency interpretations and judicial decisions; and

•our beliefs in our competitive position.

We caution you that the foregoing list does not contain all of the forward-looking statements made in this report. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, prospects, and financial needs. These forward-looking statements speak only as of the date of this report and are subject to a number of risks, uncertainties and assumptions described in the section titled “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 and elsewhere in this report. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. We disclaim any intention or obligation to publicly update or revise any forward-looking statements for any reason or to conform such statements to actual results or revised expectations, except as required by law.

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PART I. — FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements-(Unaudited)

VERACYTE, INC.

Condensed Consolidated Balance Sheets

(unaudited)

(In thousands, except share and par value amounts)


	March 31, 2026		December 31, 2025

Assets
Current assets:
Cash and cash equivalents	$	263,136	$	362,578
Short-term investments	175,924		50,311
Accounts receivable	50,112		44,660
Supplies	21,416		20,546
Prepaid expenses and other current assets	11,587		10,281
Total current assets	522,175		488,376
Property, plant and equipment, net	22,652		22,192
Right-of-use assets, operating leases	35,865		36,599
Intangible assets, net	85,863		89,148
Goodwill	767,154		767,154
Restricted cash	1,657		1,648
Other assets	1,034		902
Total assets	$	1,436,400	$	1,406,019
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	6,908	$	4,593
Accrued liabilities	43,129		48,801
Current portion of deferred revenue	749		1,160
Current portion of acquisition-related contingent consideration	982		1,332
Current portion of operating lease liabilities	4,347		4,051

Total current liabilities	56,115		59,937

Deferred tax liabilities	636		646
Acquisition-related contingent consideration, net of current portion	257		257
Operating lease liabilities, net of current portion	34,986		35,603

Total liabilities	91,994		96,443
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized, no shares issued and outstanding as of March 31, 2026 and December 31, 2025	—		—
Common stock, $0.001 par value; 125,000,000 shares authorized, 79,791,856 and 79,359,005 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively	80		79
Additional paid-in capital	1,701,470		1,695,339
Accumulated deficit	(348,923)		(377,630)
Accumulated other comprehensive loss	(8,221)		(8,212)
Total stockholders’ equity	1,344,406		1,309,576
Total liabilities and stockholders’ equity	$	1,436,400	$	1,406,019

The accompanying notes are an integral part of these condensed consolidated financial statements.

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VERACYTE, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except share and per share amounts)


	Three Months Ended March 31,
		2026		2025
Revenue:
Testing revenue		$	135,091	$	107,309
Product revenue		3,679		3,580
Biopharmaceutical and other revenue		301		3,584
Total revenue		139,071		114,473
Cost of revenue:
Cost of testing revenue		33,306		28,260
Cost of product revenue		1,891		1,422
Cost of biopharmaceutical and other revenue		8		2,698
Intangible asset amortization - cost of revenue		2,707		2,585
Total cost of revenue		37,912		34,965
Gross profit		101,159		79,508
Operating expenses:
Research and development		27,098		17,720
Selling and marketing		27,156		24,454
General and administrative		23,680		33,808

Intangible asset amortization - operating expenses		579		622
Total operating expenses		78,513		76,604
Income from operations		22,646		2,904
Other income, net		7,328		4,524
Income before income taxes		29,974		7,428
Income tax provision		1,267		381
Net income		$	28,707	$	7,047
Earnings per share:
Basic		$	0.36	$	0.09
Diluted		$	0.35	$	0.09
Shares used to compute earnings per common share:
Basic		79,536,601		78,028,254
Diluted		81,313,588		80,056,024

The accompanying notes are an integral part of these condensed consolidated financial statements.

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VERACYTE, INC.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(In thousands)


	Three Months Ended March 31,
		2026		2025
Net income		$	28,707	$	7,047
Other comprehensive income (loss):
Change in currency translation adjustments		(9)		7,449








Net comprehensive income		$	28,698	$	14,496

The accompanying notes are an integral part of these condensed consolidated financial statements.

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VERACYTE, INC.

Condensed Consolidated Statements of Stockholders' Equity

(Unaudited)

(In thousands)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
	Shares	Amount












Balance at December 31, 2025	79,359	$	79	$	1,695,339	$	(377,630)	$	(8,212)	$	1,309,576

Issuance of common stock upon exercise of stock options and vesting of restricted stock units	336	1		795		—		—		796
Issuance of common stock under employee stock purchase plan (ESPP)	97	—		1,939		—		—		1,939
Tax portion of vested restricted stock units	—	—		(9,364)		—		—		(9,364)
Stock-based compensation expense (employee)	—	—		12,384		—		—		12,384
Stock-based compensation expense (ESPP)	—	—		377		—		—		377
Net income	—	—		—		28,707		—		28,707
Currency translation adjustments	—	—		—		—		(9)		(9)


Balance at March 31, 2026	79,792	$	80	$	1,701,470	$	(348,923)	$	(8,221)	$	1,344,406


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
	Shares	Amount











Balance at December 31, 2024	77,773	$	78	$	1,655,961	$	(443,983)	$	(36,090)	$	1,175,966
Issuance of common stock upon exercise of stock options and vesting of restricted stock units	449	—		1,320		—		—		1,320
Issuance of common stock under ESPP	84	—		1,647		—		—		1,647
Tax portion of vested restricted stock units	—	—		(9,451)		—		—		(9,451)
Stock-based compensation expense (employee)	—	—		10,753		—		—		10,753

Stock-based compensation expense (ESPP)	—	—		205		—		—		205
Net income	—	—		—		7,047		—		7,047
Currency translation adjustments	—	—		—		—		7,449		7,449
Balance at March 31, 2025	78,306	$	78	$	1,660,435	$	(436,936)	$	(28,641)	$	1,194,936

The accompanying notes are an integral part of these condensed consolidated financial statements.

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VERACYTE, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)


	Three Months Ended March 31,
	2026		2025
Operating activities
Net income	$	28,707	$	7,047
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,430		5,362
Loss on disposal of property, plant and equipment	366		—
Stock-based compensation	12,761		10,958
Deferred income taxes	(10)		15
Noncash lease expense	732		904
Revaluation of acquisition-related contingent consideration	(350)		(1,954)
Effect of foreign currency on operations	(80)		(1,585)
Amortization of discount on short-term investments	(614)		(882)


Changes in operating assets and liabilities:
Accounts receivable	(5,567)		(7,053)
Supplies	(870)		(2,298)
Prepaid expenses and other current assets	(1,306)		(2,928)
Other assets	(132)		122
Operating lease liabilities	(319)		(577)
Accounts payable	2,587		7,120
Accrued liabilities and deferred revenue	(6,120)		(8,889)
Net cash provided by operating activities	35,215		5,362
Investing activities

Purchase of short-term investments	(124,999)		(49,999)



Purchases of property, plant and equipment	(2,962)		(1,819)
Net cash used in investing activities	(127,961)		(51,818)
Financing activities
Payment of taxes on vested restricted stock units	(9,364)		(9,451)
Proceeds from the exercise of common stock options and employee stock purchases	2,735		2,967
Net cash used in financing activities	(6,629)		(6,484)
Decrease in cash, cash equivalents and restricted cash	(99,375)		(52,940)
Effect of foreign currency on cash, cash equivalents and restricted cash	(58)		74
Net decrease in cash, cash equivalents and restricted cash	(99,433)		(52,866)
Cash, cash equivalents and restricted cash at beginning of period	364,226		240,631
Cash, cash equivalents and restricted cash at end of period	$	264,793	$	187,765
Supplementary cash flow information:
Purchases of property, plant and equipment included in accounts payable and accrued liability	$	2,317	$	977
Cash paid for tax	$	164	$	121

Cash, Cash Equivalents and Restricted Cash:


	March 31, 2026		December 31, 2025
Cash and cash equivalents	$	263,136	$	362,578
Restricted cash	1,657		1,648
Total cash, cash equivalents and restricted cash	$	264,793	$	364,226

The accompanying notes are an integral part of these condensed consolidated financial statements.

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VERACYTE, INC.

Notes to Financial Statements

(unaudited)

1. Organization, Description of Business and Summary of Significant Accounting Policies

Veracyte, Inc., or Veracyte, or the Company, is a global diagnostics company that provides clinicians with tests for patients with, or potentially facing, a cancer diagnosis. Veracyte's tests are used by clinicians for diagnostic, prognostic, predictive and treatment decisions, as well as the detection of disease recurrence.

The Company’s headquarters are in South San Francisco, California, and it has operations in San Diego, California, Austin, Texas, and Haifa, Israel.

The Company currently offers tests in prostate cancer (Decipher Prostate); thyroid cancer (Afirma); breast cancer (Prosigna); and bladder cancer (Decipher Bladder).

The Company serves global markets with two complementary models. In the United States, it offers laboratory developed tests, or LDTs, through its centralized, CLIA certified laboratories in South San Francisco and San Diego, California, supported by its cytopathology expertise in Austin, Texas. Additionally, primarily outside of the United States, the Company provides its Prosigna test to patients through distribution to laboratories and hospitals that can perform the tests locally as an in vitro diagnostic, or IVD, test.

Basis of Presentation

The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet as of March 31, 2026, the condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025, the condensed consolidated statements of comprehensive income for the three months ended March 31, 2026 and 2025, the condensed consolidated statements of stockholders' equity for the three months ended March 31, 2026 and 2025, and the condensed consolidated statements of cash flows for the three months ended March 31, 2026 and 2025 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of its financial position, operating results, stockholders' equity and cash flows for the periods presented. The condensed consolidated balance sheet as of December 31, 2025 has been derived from audited financial statements. The results for the three months ended March 31, 2026 are not indicative of the results expected for the full year or any other period. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company operates in one segment.

Effective August 1, 2025, the Company ceased to have a controlling financial interest in its wholly-owned French subsidiary, Veracyte SAS. Accordingly, the Company derecognized the related assets and liabilities from its condensed consolidated financial statements. Prior to deconsolidation, the operating results and cash flows of Veracyte SAS were included in the Company’s condensed consolidated financial statements.

The accompanying interim period condensed consolidated financial statements and related financial information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Reclassification

Certain prior period balances have been reclassified to conform to current period presentation of the Company’s condensed consolidated financial statements and accompanying notes. Such reclassifications have no effect on previously reported results of operations, accumulated deficit, subtotals of operating, investing or financing cash flows or consolidated balance sheet totals; however, for the three months ended March 31, 2025, the Company reclassified $0.9 million of amortization of discount on short-term investments from the changes in other assets caption in the condensed consolidated statements of cash flow to a separate caption, amortization of discount on short-term investments, within the operating activities section.

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VERACYTE, INC.

Notes to Financial Statements

(unaudited)

Use of Estimates

The preparation of unaudited interim financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates include: revenue recognition; the useful lives of property, plant and equipment; the recoverability of long-lived assets; the incremental borrowing rates for leases; the estimation of the fair value of intangible assets and contingent consideration; stock-based compensation; income tax uncertainties, including a valuation allowance for deferred tax assets; credit related losses on investments; and allowance for credit losses and contingencies. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenue and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and assumptions.

Concentrations of Credit Risk and Other Risks and Uncertainties

The majority of the Company’s cash and cash equivalents are deposited with three major financial institutions in the United States. Deposits in these institutions may exceed the amount of insurance provided on such deposits. The Company has not realized any losses on its deposits of cash and cash equivalents other than exchange rate losses related to foreign currency denominated accounts.

Several of the components of the Company’s sample collection kits and CLIA test reagents, IVD products and associated systems, as well as the systems service and service kits, are obtained from single-source suppliers. If these single-source suppliers fail to satisfy the Company’s requirements on a timely basis, or are unable to provide the Company with reagents that perform to specifications, the Company could suffer delays in being able to deliver its diagnostic solutions, suffer a possible loss of revenue, or incur higher costs, any of which could adversely affect its operating results.

Through March 31, 2026, the Company has derived most of its revenue from the sale of Decipher Prostate and Afirma testing. To date, Decipher Prostate and Afirma testing have been delivered primarily to physicians in the United States.

The Company is also subject to credit risk from its accounts receivable related to its sales. Credit risk for accounts receivable from testing revenue is incorporated in testing revenue accrual rates as the Company assesses historical collection rates and current developments to determine accrual rates and amounts the Company will ultimately collect. The Company generally does not perform evaluations of customers’ financial condition for testing revenue and generally does not require collateral. The Company assesses credit risk and the amount of accounts receivable the Company will ultimately collect for product, biopharmaceutical and other revenue based on collection history, current developments and credit worthiness of the customer. The estimate of credit losses is not material as of March 31, 2026.

The Company’s total third-party payers and other customers in excess of 10% of total revenue and their related revenue as a percentage of total revenue were as follows:


	Three Months Ended March 31,
		2026		2025
Medicare		34	%	33	%
UnitedHealthcare		13	%	13	%
		47	%	46	%

In the above table, Medicare Advantage plans are included with their associated private payer amounts and Medicare amounts do not include Medicare Advantage.

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VERACYTE, INC.

Notes to Financial Statements

(unaudited)

The Company's significant third-party payers in excess of 10% of total accounts receivable and their related accounts receivable balance as a percentage of total accounts receivable were as follows:


	March 31, 2026		December 31, 2025
Medicare	23	%	20	%
UnitedHealthcare	16	%	14	%

Cash and Cash Equivalents

The Company considers demand deposits in a bank, money market funds and highly liquid investments with maturities at the time of purchase of three months or less to be cash equivalents.

Short-Term Investments

The Company's short-term investments consist of United States treasury securities and certificates of deposit with maturities at the time of purchase that were between three months and one year. The Company classifies these investments as held-to-maturity debt securities, which are reported at amortized cost. Discounts or premiums from the purchase of the securities are recognized as a component of interest income in other income, net in the consolidated statements of operations. Investments are initially recorded net of an allowance for expected credit losses, if any, which are remeasured each period and any impairments are recognized as an expense. Unrealized gains and losses are not recognized in income. As of both March 31, 2026 and December 31, 2025, no allowances for expected credit losses had been recorded and there have been no impairment or credit losses on the Company's short-term investments.

Restricted Cash

The Company had deposits of $1.7 million and $1.6 million included in long-term assets as of March 31, 2026 and December 31, 2025, respectively, restricted from withdrawal and held by banks in the form of collateral for irrevocable standby letters of credit held as security for the Company's leases.

Revenue Recognition

The Company recognizes revenue in accordance with the provisions of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, 606, Revenue from Contracts with Customers, or ASC 606. This process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. Performance obligations are considered satisfied once the Company has completed a service or transferred control of a product to the customer.

In arrangements involving more than one service or good, each required service or good is evaluated to determine whether it qualifies as a distinct performance obligation based on whether (i) the customer can benefit from the service or good either on its own or together with other resources that are readily available and (ii) the service or good is separately identifiable from other promises in the contract. The consideration under the arrangement is then allocated to each separate distinct performance obligation based on its respective relative stand-alone selling price. The estimated selling price of each deliverable reflects the Company's best estimate of what the selling price would be if the deliverable was regularly sold by the Company on a stand-alone basis or using an adjusted market assessment approach if selling price on a stand-alone basis is not available. The consideration allocated to each distinct performance obligation is recognized as revenue when control is transferred which may be at a point in time or over time.

Testing Revenue

The Company recognizes testing revenue from the sale of tests performed for customers, including patients and institutions, at the time test results are reported to physicians. Most tests requested by customers are sold without a written agreement; however, the Company determines that an implied contract exists with its customers for whom a physician will

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VERACYTE, INC.

Notes to Financial Statements

(unaudited)

order the test. The Company identifies each sale of its test to a customer as a single performance obligation. A stated contract price does not exist and the transaction price for each implied contract with a customer represents variable consideration. The Company uses the expected value method of estimating variable consideration. The Company estimates the variable consideration under the portfolio approach and considers the historical reimbursement data from third-party commercial and governmental payers and patients, as well as known or anticipated reimbursement trends not reflected in the historical data. The Company monitors the estimated amount to be collected in the portfolio at each reporting period based on actual cash collections in order to assess whether a revision to the estimate is required. Both the estimate and any subsequent revision contain uncertainty and require the use of significant judgment in the estimation of the variable consideration and application of the constraint for such variable consideration. The Company analyzes its actual cash collections over the expected reimbursement period and compares it with the estimated variable consideration for each payer group and any difference is recognized as an adjustment to estimated revenue after the expected reimbursement period, subject to assessment of the risk of future revenue reversal. For the three months ended March 31, 2026 and 2025, the Company recorded $4.2 million and $0.4 million, respectively, resulting from cash collections exceeding the estimated variable consideration related to tests reported in previous years, including revenue received from successful appeals of reimbursement denials, net of recoupments.

Product Revenue

The Company's product revenue primarily consists of the Prosigna IVD breast cancer assay, as well as to a much lesser extent, related diagnostic kits and services. Product revenue from diagnostic kits is generally recognized upon shipment from the contract manufacturer. Shipping and handling costs incurred for product shipments are included in product revenue. Revenue is presented net of the taxes that are collected from customers and remitted to governmental authorities.

Biopharmaceutical and Other Revenue

Accounts receivable from biopharmaceutical and other revenue was $1.1 million at March 31, 2026 and $3.6 million at December 31, 2025. Deferred revenue related to these agreements was $0.7 million at March 31, 2026 and $1.2 million at December 31, 2025. Following the restructuring proceedings affecting Veracyte SAS, as of August 2025 Veracyte SAS no longer provides biopharmaceutical services, contract manufacturing or contract development services. Revenue included in biopharmaceutical and other revenue for the three months ended March 31, 2026 and 2025 was as follows (in thousands of dollars):


	Three Months Ended March 31,
		2026		2025
Biopharmaceutical revenue		$	301	$	2,297
Contract manufacturing and testing		—		1,287
Total		$	301	$	3,584

Cost of Testing Revenue

The components of the Company's cost of testing revenue are laboratory expenses, sample collection expenses, compensation expense, license fees and royalties, depreciation, other expenses such as equipment and laboratory supplies, and allocations of facility and information technology expenses. Costs associated with performing tests are expensed as the test is processed regardless of whether and when revenue is recognized with respect to that test.

Cost of Product Revenue

Cost of product revenue consists primarily of costs of diagnostic kit components and reagents, labor, delivery costs and royalties for licensed technologies included in the Company's products. Subsequent to the restructuring proceedings affecting Veracyte SAS in August 2025, the costs of diagnostic kit components and reagents and labor costs are paid to a third-party contract manufacturer. The cost of the finished product is recognized in the period the related revenue is recognized.

Cost of Biopharmaceutical and Other Revenue

Cost of biopharmaceutical and other revenue consists of costs of performing activities under arrangements that require the Company to license or provide access to its assets or laboratory testing services, as well as costs incurred in providing

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VERACYTE, INC.

Notes to Financial Statements

(unaudited)

contracted research and development and manufacturing activities. These costs are mainly composed of compensation, manufacturing and laboratory supplies, and pass-through costs. Following the restructuring proceedings affecting Veracyte SAS, as of August 2025 Veracyte SAS no longer provides biopharmaceutical services, contract manufacturing or contract development services.

Recent Accounting Pronouncements

In November 2024, the FASB issued Accounting Standards Update, or ASU, 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 will require public business entities to disclose in the notes to the financial statements, at each interim and annual reporting period, specific information about certain costs and expenses, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each expense caption presented on the face of the income statement, and the total amount of an entity's selling expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, and may be applied either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance on the consolidated financial statements.

2. Net Income Per Common Share

Basic earnings per share, or EPS, is computed based on the weighted average number of common shares outstanding during the period. Diluted EPS is computed based on the sum of the weighted average number of common shares and potentially dilutive common shares outstanding during the period. In loss periods, basic and diluted loss per share are identical since the effect of potentially dilutive common shares is antidilutive and therefore excluded. Potentially dilutive common shares from equity awards are determined using the average share price for each period under the treasury stock method. In addition, proceeds from exercises of equity awards and the average amount of unrecognized compensation expense for equity awards are assumed to be used to repurchase shares. The following table sets forth the computation of basic and diluted EPS (in thousands, except per-share amounts):


	Three Months Ended March 31,
		2026		2025
Numerator for basic and diluted EPS — net income (A)		$	28,707	$	7,047
Denominator for basic EPS — weighted average shares (B)		79,537		78,028
Effect of potentially dilutive common stock from:
Shares of common stock subject to outstanding options		490		671
Restricted stock units		1,243		1,320
Employee stock purchase plan		44		37
Dilutive potential common shares		1,777		2,028
Denominator for diluted EPS — adjusted weighted average shares and assumed conversions (C)		81,314		80,056
Basic EPS (A / B)		$	0.36	$	0.09
Diluted EPS (A / C)		$	0.35	$	0.09
Common stock equivalent shares excluded from the dilutive calculation due to antidilutive effect:
Shares of common stock subject to outstanding options		162		305
Restricted stock units		73		27

Anti-dilutive potential common shares		235		332

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3. Balance Sheet Components

Goodwill

Goodwill was $767.2 million as of both March 31, 2026 and December 31, 2025. The Company has not recorded any impairment related to goodwill.

Intangible Assets, Net

Intangible assets include finite-lived product technology, customer relationships, licenses and trade names and indefinite-lived in-process research and development. Intangible assets consisted of the following (in thousands of dollars):


	March 31, 2026						December 31, 2025						Weighted Average Remaining Amortization Period (Years)
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Percepta product technology	$	16,000	$	(11,733)	$	4,267	$	16,000	$	(11,467)	$	4,533	4
Prosigna product technology	4,120		(1,740)		2,380		4,120		(1,671)		2,449		8.7
Decipher product technology	97,300		(45,930)		51,370		97,300		(43,558)		53,742		6.3
Decipher trade names	4,000		(4,000)		—		4,000		(3,843)		157
C2i developed technology	25,300		(3,654)		21,646		25,300		(3,233)		22,067		12.8
Total finite-lived intangibles	146,720		(67,057)		79,663		146,720		(63,772)		82,948		8.0
In-process research and development	6,200		—		6,200		6,200		—		6,200
Total intangible assets	$	152,920	$	(67,057)	$	85,863	$	152,920	$	(63,772)	$	89,148

Acquisition-related intangibles are generally finite-lived and are carried at cost less accumulated amortization. Amortization of the finite-lived intangible assets is recognized on a straight-line basis over their estimated lives, which approximates the pattern in which the economic benefits of the intangible assets are expected to be realized.

Amortization expense of $3.3 million and $3.2 million was recognized for the three months ended March 31, 2026 and 2025, respectively.

The estimated future aggregate amortization expense as of March 31, 2026 is as follows (in thousands of dollars):


Year Ending December 31,	Amounts
2026 remainder of year	$	9,386
2027	12,515
2028	12,515
2029	12,515
2030	11,715
Thereafter	21,017
Total	$	79,663

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands of dollars):


	March 31, 2026		December 31, 2025
Accrued compensation expenses	$	18,935	$	27,459
Accrued other	24,194		21,342
Total accrued liabilities	$	43,129	$	48,801

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4. Fair Value Measurements

The Company records certain of its financial assets and liabilities at fair value. The accounting guidance for fair value provides a framework for measuring fair value and clarifies the definition of fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:

•Level I: Inputs which include quoted prices in active markets for identical assets and liabilities;

•Level II: Inputs other than Level I that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

•Level III: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The carrying amounts of certain financial instruments of the Company, including cash and cash equivalents, prepaid expenses and other current assets, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. The fair value of the Company’s financial assets include treasury bills, money market funds and deposits for leases of the Company's facilities. As of March 31, 2026 and December 31, 2025, the Company had the following financial instruments measured at fair value (in thousands of dollars):


March 31, 2026	Level I		Level II		Level III		Total		Balance Sheet Line	Recorded Method
Assets
Money market funds	$	29,659	$	—	$	—	$	29,659	Cash and cash equivalents	Fair value
Treasury bills	100,924		—		—		100,924		Short-term investments	Amortized cost
Certificates of deposit	—		75,000		—		75,000		Short-term investments	Amortized cost
Deposits for the leases	1,657		—		—		1,657		Restricted cash	Fair value
Total assets	$	132,240	$	75,000	$	—	$	207,240
Liabilities
Acquisition-related contingent consideration	$	—	$	—	$	1,239	$	1,239	Acquisition-related contingent consideration	Fair value

December 31, 2025	Level I		Level II		Level III		Total		Balance Sheet Line	Recorded Method
Assets
Money market funds	$	29,300	$	—	$	—	$	29,300	Cash and cash equivalents	Fair value
Treasury bills	50,300		—		—		50,300		Cash and cash equivalents	Fair value
Treasury bills	50,311		—		—		50,311		Short-term investments	Amortized cost
Deposits for the leases	1,648		—		—		1,648		Restricted cash	Fair value
Total assets	$	131,559	$	—	$	—	$	131,559
Liabilities
Acquisition-related contingent consideration	$	—	$	—	$	1,589	$	1,589	Acquisition-related contingent consideration	Fair value

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VERACYTE, INC.

Notes to Financial Statements

(unaudited)

There were no transfers between Levels 1, 2 or 3 for the three months ended March 31, 2026 and 2025.

As of March 31, 2026 and December 31, 2025, the contingent consideration related to the acquisition of the exclusive global diagnostic license to the nCounter Analysis System was remeasured to $1.2 million and $1.6 million, respectively. For the three months ended March 31, 2026 and 2025, reversal of expense of $0.4 million and zero, respectively, was recorded. As of March 31, 2026, the achievement of one of the milestones is forecasted to occur within the next 12 months. As a result, $1.0 million of the contingent consideration is included in short term liabilities at March 31, 2026.

The fair value of contingent consideration includes inputs that are not observable in the market. The estimation of the fair value of the contingent consideration is based on the present value of the expected payments calculated by assessing the likelihood of when the related milestones would be achieved and estimating the Company's borrowing rate. These estimates form the basis for making judgments about the carrying value of the contingent consideration that are not readily apparent from other sources. Changes to the forecasts for the achievement of the milestones and the borrowing rate can significantly affect the estimated fair value of the contingent consideration. As of March 31, 2026 and December 31, 2025, the Company calculated the estimated fair value of the milestones using the following significant unobservable inputs:


	Value or Range (Weighted-Average)
Unobservable input	March 31, 2026	December 31, 2025
Discount rate	5.3%	4.8%
Probability of achievement	4% - 30% (25%)	4% - 40% (34%)

Short-Term Investments Held-to-Maturity

The Company's short-term investments consist of United States treasury securities and certificates of deposit with maturities, at the time of purchase, that were between three months and one year. Based upon the Company's intent and ability to hold its short-term investments to maturity, the Company classified these investments as held-to-maturity and recorded them at amortized cost. As of March 31, 2026 and December 31, 2025, the Company had the following short-term investments (in thousands of dollars):


	March 31, 2026
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Fair Value
Treasury bills	$	100,924	$	57	$	—	$	100,981
Certificates of deposit	75,000		—		(125)		74,875
Total short-term investments	$	175,924	$	57	$	(125)	$	175,856


	December 31, 2025
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Fair Value
Treasury bills	$	50,311	$	69	$	—	$	50,380

5. Commitments and Contingencies

Operating Leases

The Company leases office and laboratory facilities in the U.S., including in South San Francisco and San Diego, California and Austin, Texas, and, prior to August 2025, in Marseille, France. Effective August 2025, in connection with the restructuring proceeding in Veracyte SAS, the Company is no longer a party to the lease in Marseille, France. The lease terms of the Company’s leases as of March 31, 2026 extend to March 2040 and contain extension of lease terms and expansion options. The leases have a weighted average remaining lease term of 11.0 years as of March 31, 2026. The Company had deposits of $1.7 million and $1.6 million included in long-term assets as of March 31, 2026 and December 31, 2025,

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VERACYTE, INC.

Notes to Financial Statements

(unaudited)

respectively, restricted from withdrawal and held by banks in the form of collateral for irrevocable standby letters of credit held as security for the leases.

The Company determined its operating lease liabilities using payments through their current expiration dates and a weighted average discount rate of 11.4% based on the rate that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments in a similar economic environment. Operating lease liabilities along with the associated right-of-use assets are disclosed in the accompanying condensed consolidated balance sheets. After the adoption of ASC 842, Leases, or ASC 842, the Company classified its deferred rent for tenant improvements with its operating lease right-of-use assets on the consolidated balance sheets.

Future minimum lease payments under non-cancelable operating leases as of March 31, 2026 are as follows (in thousands of dollars):


Year Ending December 31,	Amounts
Remainder of 2026	$	2,952
2027	6,999
2028	7,173
2029	6,858
2030	7,055
Thereafter	40,405
Total future minimum lease payments	71,442
Less: amount representing interest	32,109
Present value of future lease payments	39,333
Less: short-term lease liabilities	4,347
Long-term lease liabilities	$	34,986

The Company recognizes operating lease expense on a straight-line basis over the non-cancelable lease period. The following table summarizes operating lease expense and cash paid for amounts included in the measurement of lease liabilities (in thousands of dollars):


	Three Months Ended March 31,
		2026		2025
Operating lease expense		$	1,771	$	2,254
Cash paid for amounts included in the measurement of lease liabilities		$	1,362	$	1,922

Contingencies

From time to time, the Company may be involved in various legal proceedings and claims arising in the ordinary course of business. Although the outcomes of such matters cannot be predicted with certainty, the Company believes there is no litigation pending that could have, either individually or in the aggregate, a material adverse impact on the Company's consolidated financial statements.

On May 1, 2025, the Company filed a complaint in federal court in the Eastern District of Texas alleging that Sonic Healthcare USA, Inc., the healthcare company that is believed to offer ThyroSeq v3, is infringing three of the Company’s patents related to molecular testing of thyroid nodules. The complaint seeks treble damages, attorneys’ fees and costs as well as injunctive relief. On June 4, 2025, the Company filed an amended complaint asserting two additional patents. On July 21, 2025, Sonic Healthcare USA, Inc. filed an answer and a motion to dismiss. The court denied Sonic Healthcare USA, Inc.’s motion to dismiss on January 20, 2026. The jury trial is currently scheduled for the first quarter of next year.

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6. Stockholders’ Equity

Common Stock

The Company had reserved shares of common stock for issuance as follows:


	March 31, 2026	December 31, 2025
Stock options and restricted stock units issued and outstanding	5,620,597	4,806,993
Stock options and restricted stock units available for grant under stock option plans	9,704,039	10,937,821
Common stock available for the Employee Stock Purchase Plan	798,732	895,255
Total	16,123,368	16,640,069

7. Components of Other Income

Other income, net consists of the following (in thousands of dollars):


	Three Months Ended March 31,
		2026		2025
Interest income		$	3,478	$	2,762
Settlement of escrow claims		4,179		—
Interest expense		—		—
Gain (loss) on currency revaluation		23		1,546
Other		(352)		216
Total		$	7,328	$	4,524

8. Segment

The chief operating decision maker for the Company is the Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of allocating resources and assessing financial performance. The Company has a single reporting unit associated with the development and commercialization of diagnostic tests and biopharmaceutical services. The accounting policies of the Company's single segment are the same as those described in the summary of significant accounting policies in Note 1, Organization, Description of Business and Summary of Significant Accounting Policies. The chief operating decision maker assesses performance of the Company's single segment and decides how to allocate resources based on consolidated net income. Under the current organizational structure, this measure is not discretely available or required individually for any of the Company’s business activities and is only available at the consolidated level. The monitoring of budgeted versus actual results are used in assessing performance of the Company's single segment, allocating resources and in establishing management’s compensation. The Company's chief operating decision maker intends for all revenue generating activities to rely on cross-functional activities across the consolidated entity in order to operate. No individual besides the chief operating decision maker has been tasked with reviewing discrete operating results of the business activities, nor is there any intent to bifurcate the overall business review process to produce discrete operating results specific to any of the Company's business activities. The measure of segment assets is reported on the consolidated balance sheet as total consolidated assets. Consolidated revenue does not include any inter-segment sales or transfers.

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Information about reported segment revenue, measures of segment profit or loss, significant segment expenses and reconciliation to income from operations was as follows (in thousands):


	Three Months Ended March 31,
		2026		2025
Revenue:
Testing revenue		$	135,091	$	107,309
Product revenue		3,679		3,580
Biopharmaceutical and other revenue		301		3,584
Total revenue		139,071		114,473
Cost of revenue:
Cost of testing revenue:
Laboratory supplies and reagents expense		12,314		13,067
Sample collection expense		3,288		2,825
Compensation expense		9,804		5,611
Other cost of testing revenue (1)		4,937		3,385
Allocation of facilities and IT expenses		2,963		3,372
Total cost of testing revenue		33,306		28,260
Cost of product revenue:
Product costs		1,401		109
License fees and royalties		313		324
Other cost of product revenue (2)		174		792
Allocation of facilities and IT expenses		3		197
Total cost of product revenue		1,891		1,422
Cost of biopharmaceutical and other revenue:
Compensation expense		—		1,240
Other cost of biopharmaceutical and other revenue (3)		8		1,044
Allocation of facilities and IT expenses		—		414
Total cost of biopharmaceutical and other revenue		8		2,698
Intangible asset amortization - cost of revenue		2,707		2,585
Gross profit		101,159		79,508
Operating expenses:
Research and development:
Compensation expense		15,547		9,748
Direct research and development expense		4,198		4,141
Other research and development expenses (4)		5,460		1,815
Allocation of facilities and IT expenses		1,893		2,016
Total research and development		27,098		17,720
Selling and marketing:
Compensation expense		19,972		17,635
Direct marketing expense		1,455		710
Other selling and marketing expenses (5)		4,561		3,853
Allocation of facilities and IT expenses		1,168		2,256
Total selling and marketing		27,156		24,454
General and administrative:
Compensation expense		16,236		20,173
Other general and administrative expenses (6)		13,471		21,890
Allocation of facilities and IT expenses		(6,027)		(8,255)
Total general and administrative		23,680		33,808

Intangible asset amortization - operating expenses		579		622
Other income, net		(7,328)		(4,524)
Income tax provision		1,267		381
Net income		$	28,707	$	7,047

________________

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(1)Other cost of testing revenue includes cytopathology services, depreciation and amortization and other expenses.

(2)Other cost of product revenue includes contract manufacturing fees, license fees and royalties, depreciation and amortization and other expenses.

(3)Other cost of biopharmaceutical and other revenue includes professional fees, information technology expense, depreciation and amortization and other expenses.

(4)Other research and development expenses include depreciation and amortization and other expenses.

(5)Other selling and marketing expenses include travel, entertainment, conference and other expenses.

(6)Other general and administrative expenses include professional fees, information technology expense, occupancy costs, depreciation and amortization, contingent consideration and other expenses.

9. Income Taxes

The provision for income taxes is based on the current estimate of the annual effective tax rate applied to the Company’s year to date income and is adjusted for discrete items recorded in the period. For the three months ended March 31, 2026 and 2025, the Company’s effective tax rate was 4.2% and 5.1%, respectively. For the three months ended March 31, 2026 and 2025, the primary difference between the effective tax rate and the federal statutory rate is driven by unfavorable permanent differences, offset by the full valuation allowance the Company has established on its federal, state and foreign net operating losses and credits.

The Company recorded income tax expense of $1.3 million and $0.4 million for the three months ended March 31, 2026 and 2025, respectively. The provision for income taxes recorded in the three months ended March 31, 2026 and 2025 consists primarily of federal, state and foreign income taxes.

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

The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025, or our Annual Report.

As discussed in the section titled “Special Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those set forth herein under the heading “Special Note Regarding Forward-Looking Statements” and in the section titled “Risk Factors” under Part II, Item 1A of this report and under Part I, Item 1A of our Annual Report. Historical results are not necessarily indicative of future results.

When used in this report, all references to "Veracyte," the "company," "we," "our" and "us" refer to Veracyte, Inc., together with its consolidated subsidiaries, unless otherwise noted.

The following is a non-exhaustive list of Veracyte and its affiliates’ trademarks and/or registered trademarks in the United States and certain other countries: Afirma, Decipher, Envisia, GenomeDx, GRID, Percepta, Prosigna, TrueMRD, Veracyte, and the Veracyte logo. nCounter is the registered trademark of Bruker Spatial Biology, Inc. and used by Veracyte under license.

Overview

We are a global diagnostics company that empowers clinicians with the high-value insights they need to guide and assure patients at pivotal moments in the race to diagnose and treat cancer. Our high-performing tests enable clinicians to make more confident diagnostic, prognostic and predictive treatment decisions, as well as the detection of disease recurrence. Insights from these tests help patients avoid unnecessary procedures and interventions and accelerate time to appropriate treatment, thereby improving outcomes for patients across our global markets.

In the United States, we currently offer tests in prostate cancer (Decipher Prostate), thyroid cancer (Afirma), breast cancer (Prosigna) and bladder cancer (Decipher Bladder). In addition, we are planning to offer our Prosigna test for breast cancer as an LDT in 2026.

We serve global markets with two complementary models. In the United States, we offer LDTs through our centralized CLIA certified laboratories in South San Francisco and San Diego, California, supported by our cytopathology expertise in Austin, Texas. Additionally, outside of the United States, we provide IVD tests to patients through distribution to laboratories and hospitals that can perform the tests locally. Our international distribution of IVDs is currently focused on our Prosigna test and, in the future, we intend to offer Decipher Prostate as an IVD test. We believe our broad menu of advanced diagnostic tests, combined with our ability to deliver them globally, differentiates us in the diagnostics industry.

We are aiming to expand our role across the cancer continuum with the addition of our minimal residual disease, or MRD platform, TrueMRD platform, and our assays. This will broaden our portfolio of tests to help monitor the success of a therapeutic or surgical intervention, and support the determination of the best course of action for each patient.

Macroeconomic Factors

Recent macroeconomic factors, such as interest rate fluctuations and inflation in the United States and other markets, evolving international trade policies and government actions relating to tariffs, as well as volatility in the global banking and finance systems, geopolitical challenges and other measures that restrict international trade, have resulted in volatility in the capital and credit markets globally. Moreover, the continued fluctuation and reduced valuation of the U.S. dollar compared to other currencies has impacted and may continue to impact our results of operations. We intend to continue to monitor macroeconomic conditions closely and may determine to take certain financial or operational actions in response to such conditions as appropriate. In addition, macroeconomic effects of regional conflicts like those in the Middle East and between Russia and Ukraine may adversely impact our business and operating results. Finally, the ongoing conflict in the Middle East and related political, military and security conditions in and around Israel may disrupt our Israel business operations and employees that we acquired through our acquisition of 100% of the outstanding equity interests of C2i, or the C2i Acquisition.

The extent of the impact of macroeconomic factors on our future liquidity and operational performance will depend on future developments and their impact on our customers' operations and our sales and renewal cycles. We may also be adversely

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affected by further changes in central bank policies and fluctuations in interest rates, rates of inflation, and changes in foreign currency exchange rates. See "Risk Factors" for further discussion.

Factors Affecting Our Performance

Reported Total Test Volume

Our performance currently depends on the number of tests that we perform and report as completed in our CLIA-certified laboratories and the number of tests purchased by our customers, which we refer to as our reported total test volume. Factors impacting our reported total test volume include, but are not limited to:

•the number of samples that we receive that meet the medical indication for each test performed;

•the quantity and quality of the sample received;

•receipt of the necessary documentation, such as physician order and patient consent, required to perform, bill and collect for our tests;

•the patient's ability to pay or provide necessary insurance coverage for the tests performed;

•the time it takes us or our customers to perform our tests and report the results, including as a result of supply chain challenges (including quality and supply of single-source reagents and consumables);

•the seasonality inherent in our business, such as the impact of workdays per period, weather-related disruptions, timing of industry conferences and timing of when patient deductibles are exceeded, which also impacts the reimbursement we receive from insurers;

•fluctuations in demand for our product test kits, including as a result of higher average selling prices and overall spending constraints across our industry; and

•our ability to obtain prior authorization or meet other requirements instituted by payers, benefit managers, or regulators necessary to be paid for our tests.

Continued Adoption of and Reimbursement for our Products

Revenue growth depends on our ability to secure coverage decisions, achieve broader reimbursement from third-party payers, obtain prior authorization, expand our base of prescribing physicians and increase our penetration in existing accounts. Because some payers consider our products experimental and investigational, we may not receive payment for tests and payments we receive may not be at acceptable levels. We expect our revenue growth to increase if more payers make a positive coverage decision and as payers enter into contracts with us, which should enhance our revenue and cash collections.

Our sales teams are aligned under our general manager-based structure to focus on specific products and markets. If we are unable to expand the base of prescribing physicians and penetration within these accounts at an acceptable rate, or if we are not able to execute our strategy for increasing reimbursement and associated collections, we may not be able to effectively increase our revenue. We expect to continue to see pressure from payers to limit the utilization of tests, generally, and we believe more payers are deploying cost containment tactics, such as requiring prior authorization, reduction of the payer portion of reimbursement and employing laboratory benefit managers to reduce utilization rates. Revenue growth also depends on our ability to secure reimbursement from government payers at a reimbursement rate that is consistent with past reimbursement rates. Changes or implementation of government regulations or reimbursement policies, including under the Protecting Access to Medicare Act of 2014, or PAMA, could result in lower reimbursement rates for our tests. Any such reductions could negatively affect our revenues and margins.

Integrating Acquisitions

Revenue growth, operational results and advances to our test offering strategy depend on our ability to integrate any acquisitions into our existing business and effectively scale their operations. The integration of acquired assets and other strategic transactions that we may pursue may impact our revenue growth, increase the cost of operations or may require management resources that otherwise would be available for ongoing development of our existing business.

New Product Development

A significant aspect of our business is our investment in development activities, including activities related to the development of new tests, as well as modifications and enhancements to our current tests, including the ongoing development of our Prosigna LDT test and TrueMRD platform. In addition to these development activities, we also perform clinical evidence studies which are critical to gaining clinician adoption of our tests, driving favorable coverage decisions by payers, as well as gaining guideline inclusion for such tests.

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How We Recognize Revenue

We recognize revenue in accordance with the provisions of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, 606, Revenue from Contracts with Customers, or ASC 606. This process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied.

Testing Revenue

We generally bill for testing services at the time of test completion, upon delivery of a patient report to the prescribing physician. We recognize revenue based on estimates of the cash amount that will ultimately be collected. In determining the amount to accrue for a delivered test, we consider factors such as payment history, payer coverage, whether there is a reimbursement contract between the payer and us, payment as a percentage of agreed upon rate (if applicable), amount paid per test and any current developments or changes that could impact reimbursement. These estimates require significant judgment by management. Actual results could differ from those estimates and assumptions. Upon ultimate collection, the amount received is compared to previous estimates and the amount accrued is adjusted accordingly.

Generally, cash we receive is collected within 12 months of the date the test is billed. We cannot provide any assurance as to when, if ever, or to what extent, any of these amounts will be collected. Notwithstanding our efforts to obtain payment for these tests, payers may deny our claims, in whole or in part, and we may never receive payment for these tests. Our ability to increase our testing revenue will depend on our ability to penetrate the market, obtain positive coverage policies from additional third-party payers, obtain reimbursement and/or enter into contracts with additional third-party payers for our current and new tests, and increase reimbursement rates for tests performed. Finally, should the judgments underlying our estimated reimbursement change, our accrued revenue and financial results could be negatively impacted in future periods.

We bill list price regardless of contract rate, but only recognize revenue from amounts that we estimate are collectible and meet our revenue recognition criteria. Revenue may not be equal to the billed amount due to a number of factors that we consider when determining revenue accrual rates, including differences in reimbursement rates, the amounts of patient co-payments and co-insurance, the existence of secondary payers, claims denials and the amount we expect to ultimately collect. Finally, when we increase our list price, it will increase the cumulative amounts billed but not positively impact accrued revenue. In addition, payer contracts generally include the right of offset and payers may offset payments prior to resolving disputes over tests performed.

Generally, we determine accrual rates by calculating an average of reimbursement from all payers for tests performed over a four-quarter period as it reduces the effects of temporary volatility and seasonality. The periods selected to determine accrual rates typically are at least six months old because it takes a significant period of time to collect from some payers. We may also determine accrual rates based on other factors such as coverage decisions, contracts, or more recent reimbursement data as appropriate.

The average test reimbursement rates will change over time due to a number of factors, including medical coverage decisions by payers, the effects of contracts signed with payers, changes in allowed amounts by payers, our ability to successfully win appeals for payment, and our ability to collect cash payments from third-party payers and individual patients. Historical average reimbursement is not necessarily indicative of future average reimbursement.

We incur expense for tests in the period in which the test is conducted and recognize revenue for tests in the period in which our revenue recognition criteria are met.

Product Revenue

Our product revenue consists primarily of international sales of the Prosigna breast cancer IVD and related diagnostic kits, and services. We recognize product revenue when control of the promised goods is transferred to our customers, in an amount that reflects the consideration expected to be received in exchange for those products. This process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer, either on its own or together with other resources that are readily available to the customer, and is separately identified in the contract. Performance obligations are considered satisfied once we have transferred control of a

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product to the customer, meaning the customer has the ability to use and obtain the benefit of the product. We recognize product revenue for satisfied performance obligations only when there are no uncertainties regarding payment terms or transfer of control. Shipping and handling costs incurred for product shipments are charged to our customers and included in product revenue. Revenue is presented net of the taxes that are collected from customers and remitted to government authorities.

Financial Overview

Revenue

Through March 31, 2026, we derived the majority of our revenue as testing revenue from the sale of Decipher Prostate and Afirma tests, delivered primarily to physicians in the United States. We generally invoice third-party payers upon delivery of a patient report to the prescribing physician. As such, we take the assignment of benefits and the risk of cash collection from the third-party payer and individual patients. Third-party payers and other customers in excess of 10% of total revenue and their related revenue as a percentage of total revenue were as follows for the periods presented:


	Three Months Ended March 31,
		2026		2025
Medicare		34	%	33	%
UnitedHealthcare		13	%	13	%
		47	%	46	%

In the above table, Medicare Advantage plans are included with their associated private payer amounts and Medicare amounts do not include Medicare Advantage.

Cost of Testing Revenue

The components of our cost of testing revenue are sample collection kit costs, reagent expenses, compensation expense, license fees and royalties, depreciation, customer service, other expenses such as equipment and laboratory supplies, and allocations of facility and information technology expenses. We expect cost of testing revenue in absolute dollars to increase as the number of tests we perform increases. However, we expect that the cost per test will decrease over time due to leveraging fixed costs, efficiencies we may gain as test volume increases and process enhancements such as automation, implementation of new technologies and other cost reductions. As we introduce new tests, initially our cost per test will be high as we expect to run suboptimal batch sizes, quality control batches, test batches, registry samples, and generally incur costs that may suppress or reduce gross margins. This will disproportionately increase our aggregate cost of testing revenue until we achieve processing efficiencies.

Cost of Product Revenue

Our cost of product revenue consists primarily of costs of diagnostic kit components and reagents, labor, delivery costs and royalties for licensed technologies included in our products. Subsequent to the restructuring proceedings affecting Veracyte SAS in August 2025, the costs of diagnostic kit components and reagents and labor costs are paid to a third-party contract manufacturer. As our Prosigna test kits are sold in various configurations with different numbers of tests, our product cost per test will continue to vary based on the specific kit configuration purchased by customers.

Intangible Asset Amortization - Cost of Revenue

Our finite-lived intangible assets, acquired in business combinations, are being amortized over 5 to 15 years, using the straight-line method. Intangible asset amortization - cost of revenue includes amortization of finite-lived intangible assets related to developed and product technology utilized in our current product and service offerings and customer backlog.

Research and Development

Research and development expenses primarily include compensation expense, direct research and development expenses such as laboratory supplies and costs associated with setting up and conducting clinical studies at domestic and international sites, software development expenses, professional fees, depreciation and amortization, other miscellaneous expenses and

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allocation of facility and information technology expenses. Further, research and development expenses include costs to collect clinical samples and conduct clinical studies to develop and support our products and pipeline, as well as develop future technology. We expense all research and development costs in the periods in which they are incurred. We incurred a majority of our research and development expenses in the three months ended March 31, 2026 and the year ended December 31, 2025 in support of our early-stage products, including support for the development and validation of our TrueMRD platform, as well as our Prosigna LDT test, the development of new IVD products and discovery. Going forward, we expect to incur significant expense as we invest in the continued development of our innovation engine, early-stage products including our TrueMRD platform, required clinical studies and the development of current IVD tests.

Selling and Marketing

Selling and marketing expenses consist of compensation expenses, direct marketing expenses, professional fees, other expenses such as travel and communications costs, as well as allocation of facility and information technology expenses. Our sales team of approximately 120 representatives is organized by business unit in the U.S., with separate teams calling on thyroid cancer and urologic cancer physicians. The business units have dedicated marketing support, as well as a marketing operations team that serves the commercial organization broadly. Prosigna sales outside of the U.S. are led by country managers and sales teams that call on laboratories and breast cancer oncologists.

General and Administrative

General and administrative expenses include compensation expenses for executive officers and administrative, billing personnel, professional fees for legal and audit services, occupancy costs, depreciation and amortization, and other expenses such as information technology, acquisition related costs and miscellaneous expenses, offset by allocation of facility and information technology expenses to other functions. We expect general and administrative expenses to continue to increase as we build our infrastructure to scale revenue growth, and to decline as a percentage of revenue thereafter.

Intangible Asset Amortization - Operating Expenses

Our finite-lived intangible assets, acquired in business combinations, are being amortized over 5 to 15 years, using the straight-line method. Intangible asset amortization - operating expenses includes amortization of finite-lived intangible assets related to developed technology utilized in the development of future product and service offerings, trade names and customer relationships.

Other Income (Loss), Net

Other income (loss), net consists primarily of interest income from our cash held in interest bearing accounts and our short-term investments, realized and unrealized gains and losses on foreign currency transactions, settlement of escrow claims and, prior to the restructuring proceedings affecting Veracyte SAS in August 2025, French tax credits.

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Results of Operations

Comparison of the three months ended March 31, 2026 and 2025 (in thousands of dollars, except percentages and test volume):


	Three Months Ended March 31,
		2026		2025		Change		%
Revenue:
Testing revenue		$	135,091	$	107,309	$	27,782	26%
Product revenue		3,679		3,580		99		3%
Biopharmaceutical and other revenue		301		3,584		(3,283)		(92)%
Total revenue		139,071		114,473		24,598		21%
Cost of revenue:
Cost of testing revenue		33,306		28,260		5,046		18%
Cost of product revenue		1,891		1,422		469		33%
Cost of biopharmaceutical and other revenue		8		2,698		(2,690)		(100)%
Intangible asset amortization - cost of revenue		2,707		2,585		122		5%
Total cost of revenue		37,912		34,965		2,947		8%
Gross profit		101,159		79,508		21,651		27%
Operating expenses:
Research and development		27,098		17,720		9,378		53%
Selling and marketing		27,156		24,454		2,702		11%
General and administrative		23,680		33,808		(10,128)		(30)%

Intangible asset amortization - operating expenses		579		622		(43)		(7)%
Total operating expenses		78,513		76,604		1,909		2%
Income from operations		22,646		2,904		19,742		680%
Other income, net		7,328		4,524		2,804		62%
Income before income taxes		29,974		7,428		22,546		304%
Income tax provision		1,267		381		886		233%
Net income		$	28,707	$	7,047	$	21,660	307%
Other Operating Data:
Diagnostic tests reported		45,248		38,078		7,170		19%
Product tests sold		2,367		2,577		(210)		(8)%
Total test volume		47,615		40,655		6,960		17%

Depreciation and amortization expense		$	5,430	$	5,362	$	68	1%
Stock-based compensation expense		$	12,761	$	10,958	$	1,803	16%

Revenue

Revenue increased $24.6 million for the three months ended March 31, 2026 compared to the same period in 2025. This was primarily due to a $27.8 million increase in testing revenue partially offset by a $3.3 million decrease in our biopharmaceutical and other revenue. The 26% growth in testing revenue was primarily driven by a 19% volume increase, as well as improved ASP and prior period collections. The Biopharmaceutical and other revenue decrease was due to the discontinuation of biopharmaceutical services, contract manufacturing or contract development services previously conducted in France, following the restructuring proceedings affecting Veracyte SAS, as of August 2025.

Product revenue was flat for the three months ended March 31, 2026 compared to the same periods in 2025.

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Cost of revenue

Comparison of the three months ended March 31, 2026 and 2025 is as follows (in thousands of dollars, except percentages):


	Three Months Ended March 31,
		2026		2025		Change		%
Cost of testing revenue:
Laboratory supplies and reagents expense		$	12,314	$	13,067	$	(753)	(6)	%
Sample collection expense		3,288		2,825		463		16	%
Compensation expense		9,804		5,611		4,193		75	%
Cytopathology services		1,662		1,455		207		14	%
Depreciation and amortization		709		430		279		65	%
Other expenses		2,566		1,500		1,066		71	%
Allocations		2,963		3,372		(409)		(12)	%
Total		$	33,306	$	28,260	$	5,046	18	%
Cost of product revenue:
Product costs		$	1,401	$	109	$	1,292	1,185	%
License fees and royalties		313		324		(11)		(3)	%
Depreciation and amortization		70		178		(108)		(61)	%
Other expenses		104		614		(510)		(83)	%
Allocations		3		197		(194)		(98)	%
Total		$	1,891	$	1,422	$	469	33	%
Cost of biopharmaceutical and other revenue:
Compensation expense		$	—	$	1,240	$	(1,240)	(100)	%
Depreciation and amortization		8		48		(40)		(83)	%
Other expenses		—		996		(996)		(100)	%
Allocations		—		414		(414)		(100)	%
Total		$	8	$	2,698	$	(2,690)	(100)	%
Intangible asset amortization - cost of revenue		$	2,707	$	2,585	$	122	5	%

Cost of testing revenue increased $5.0 million, or 18%, for the three months ended March 31, 2026 compared to the same period in 2025. The increase in cost of testing revenue was due to increased volume in testing, higher staffing to support higher volume, the build out of infrastructure related to current and future growth expectations, primarily related to Decipher Prostate and Afirma tests, and the assignment of customer service expenses directly to cost of revenue. These increases were partially offset by lab efficiencies and lower allocated expenses.

Cost of product revenue increased $0.5 million, or 33%, for the three months ended March 31, 2026 compared to the same periods in 2025. The increase for the three months ended March 31, 2026 is primarily related to the transition to contract manufacturing of Prosigna kits.

Cost of biopharmaceutical and other revenue includes labor costs, laboratory supplies and pass-through expenses incurred. Cost of biopharmaceutical and other revenue for the three months ended March 31, 2026 decreased by $2.7 million compared to the same periods in 2025, driven primarily by a continued decline in biopharmaceutical services, as well as contract development and manufacturing services projects as a result of the restructuring proceedings affecting Veracyte SAS that were underway throughout 2025.

Research and development

Research and development expense increased $9.4 million, or 53%, for the three months ended March 31, 2026 compared to the same period in 2025. The increase was primarily due to a $6.0 million increase from the assignment of research and

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development related software expenses previously accounted for in general and administrative and partially allocated. This was due to the addition of the Chief Development and Technology Officer and that these expenses are now fully dedicated to product development objectives. General and administrative expense allocations and compensation expense associated with added headcount and annual merit increases also increased. Spend supporting direct research and product development expense related to our ongoing development costs for our CLIA tests and MRD strategies increased but was partially offset by the impact of the deconsolidation of Veracyte SAS in August 2025.

Selling and marketing

Selling and marketing expense increased $2.7 million, or 11%, for the three months ended March 31, 2026 compared to the same period in 2025. The increase was primarily due to annual merit increases and headcount additions. Direct marketing expense increased primarily due to website design costs and expenses related to the anticipated launch of new tests.

General and administrative

General and administrative expense decreased by $10.1 million for the three months ended March 31, 2026, compared to the same period in 2025. The results were impacted primarily by a $6.0 million decrease related to the assignment of software development expenses, previously included in General and administrative expense allocations, directly to research and development, the assignment of customer service expenses directly to cost of revenue, as well as a decline in professional fees related to lower legal, audit and tax fees in the quarter. These decreases were offset by fewer allocations and reductions in the revaluation of contingent consideration related to the acquisition of C2i recognized in the prior year. General and administrative expenses related to occupancy costs and information technology costs, excluding software development, are allocated to general and administrative expense, selling and marketing expense, research and development expense, and cost of revenue based on the headcount and employee location.

Other income, net

Other income, net, increased $2.8 million for the three months ended March 31, 2026 compared to the same period in 2025, primarily due to the settlement of escrow claims of $4.2 million and an increase of $0.7 million from interest income, partially offset by a decrease of $1.5 million due to foreign currency revaluation.

Income tax expense

We recorded income tax expense of $1.3 million and $0.4 million for the three months ended March 31, 2026 and 2025, respectively.

Given our current earnings, we believe that, within the next 12 months, sufficient positive evidence may become available to allow us to reach a conclusion that a portion of the valuation allowance recorded against the deferred tax assets held may be reversed. A reversal would result in an income tax benefit for the quarterly and annual period in which we determine to release the valuation allowance. However, the exact timing and amount of a valuation allowance release are subject to change on the basis of the level of profitability that we actually achieve.

Liquidity and Capital Resources

As of March 31, 2026, we had cash and cash equivalents and short-term investments of $439.1 million. During the three months ended March 31, 2026, our cash and cash equivalents and short-term investments increased by $26.2 million. Historically, we have obtained financing primarily through sales of our equity securities. Beginning in 2023, our operations have been financed primarily by cash flows generated by our revenue. For the three months ended March 31, 2026, we had net income of $28.7 million, but we may not sustain profitability in the future. As of March 31, 2026, we had an accumulated deficit of $348.9 million.

We expect to continue to generate cash and our near- and longer-term liquidity requirements will continue to consist of costs to run our laboratories, research and development expenses, selling and marketing expenses, general and administrative expenses, working capital, capital expenditures, lease obligations, and general corporate expenses associated with the growth of our business. However, we may also use cash to acquire or invest in complementary businesses, technologies, services or products that would change our cash requirements. If we are not able to generate cash flows from our revenue to finance our cash requirements, we will need to finance future cash needs primarily through public or private equity offerings, debt financings, borrowings or strategic collaborations or licensing arrangements. If we are not able to secure additional financing

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when needed, or on terms that are favorable to us, we may have to delay, reduce the scope of or eliminate one or more research and development programs or selling and marketing initiatives, or forgo potential acquisitions or investments. In addition, we may have to work with a partner on one or more of our products or development programs, which could lower the economic value of those programs to us. Moreover, ongoing instability in the global credit markets or the banking system may impact our liquidity both in the short term and long term.

Our material cash requirements include the following obligations:

Operating Leases

We lease office and laboratory facilities in the U.S., including in South San Francisco and San Diego, California and Austin, Texas. Effective August 2025, in connection with the restructuring proceeding in Veracyte SAS, we are no longer a party to the lease in Marseille, France. The lease terms of our leases as of March 31, 2026 extend to March 2040 and contain extension of lease term and expansion options. As of March 31, 2026, the leases have a weighted average remaining lease term of 11.0 years and total future minimum lease payments of $71.4 million.

Cash Flows

The following table summarizes our cash flows for the three months ended March 31, 2026 and 2025 (in thousands of dollars):


	Three Months Ended March 31,
	2026		2025
Net cash provided by operating activities	$	35,215	$	5,362
Net cash used in investing activities	(127,961)		(51,818)
Net cash used in financing activities	(6,629)		(6,484)

Cash Flows from Operating Activities

Cash provided by operating activities for the three months ended March 31, 2026 was $35.2 million. Our net income of $28.7 million includes non-cash charges of $12.8 million of stock-based compensation expense, $5.4 million of depreciation and amortization, of which $3.3 million was related to intangible asset amortization, non-cash lease expense of $0.7 million, amortization of discount on short-term investments of $0.6 million, non-cash gains of $0.4 million from the revaluation of contingent consideration, loss of $0.4 million on the disposal of fixed assets, and $0.1 million from the effect of foreign currency changes on operations. Cash used as a result of changes in operating assets and liabilities was $11.7 million, primarily composed of a decrease in accrued liabilities and deferred revenue of $6.1 million, an increase in accounts receivable of $5.6 million, an increase in prepaid expenses and other current assets of $1.3 million, an increase in supplies of $0.9 million, a decrease in operating lease liabilities of $0.3 million partially offset by an increase in accounts payable of $2.6 million.

Cash provided by operating activities for the three months ended March 31, 2025 was $5.4 million. Our net income of $7.0 million includes non-cash charges of $11.0 million of stock-based compensation expense, $5.4 million of depreciation and amortization, of which $3.2 million was related to intangible asset amortization, non-cash lease expense of $0.9 million, non-cash gains of $2.0 million from the revaluation of contingent consideration and $1.6 million from the effect of foreign currency changes on operations. Cash used as a result of changes in operating assets and liabilities was $14.5 million, primarily composed of a decrease in accrued liabilities and deferred revenue of $8.9 million, an increase in accounts receivable of $7.1 million, an increase in prepaid expenses and other current assets of $2.9 million, and an increase in supplies and inventory of $2.3 million partially offset by an increase in accounts payable of $7.1 million.

Cash Flows from Investing Activities

Cash used in investing activities for the three months ended March 31, 2026 was $128.0 million, consisting of the purchase of $125.0 million of short-term investments and $3.0 million used in the purchase of property, plant and equipment.

Cash used in investing activities for the three months ended March 31, 2025 was $51.8 million, consisting of $50.0 million from the purchase of short-term investments and $1.8 million used in the purchase of property, plant and equipment.

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Cash Flows from Financing Activities

Cash used in financing activities for the three months ended March 31, 2026 was $6.6 million, consisting of $9.4 million in tax payments during the period related to the vesting of restricted stock units granted to employees, partially offset by $2.7 million in proceeds from the exercise of options to purchase our common stock and the purchase of stock under our Employee Stock Purchase Plan, or ESPP.

Cash used in financing activities for the three months ended March 31, 2025 was $6.5 million, consisting of $9.5 million in tax payments during the period related to the vesting of restricted stock units granted to employees, partially offset by $3.0 million in proceeds from the exercise of options to purchase our common stock and the purchase of stock under our ESPP.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, see Note 1, Organization, Description of Business and Summary of Significant Accounting Policies, in the notes to our condensed consolidated financial statements included elsewhere in this report.

Critical Accounting Policies and Estimates

Our management's discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of the condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material. We believe that the accounting policies discussed in our Annual Report are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management's judgments and estimates. There have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in our Annual Report.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

Interest Rate Risk

We are exposed to market risks in the ordinary course of our business. These risks primarily relate to interest rates. We had cash and cash equivalents and short-term investments of $439.1 million as of March 31, 2026 which consisted of bank deposits, money market funds and United States treasury securities. Such interest-bearing instruments carry a degree of risk; however, a hypothetical 10% change in interest rates during any of the periods presented would not have had a material impact on our condensed consolidated financial statements. This analysis is based on a sensitivity model that measures market value changes when changes in interest rates occur. Any realized gains or losses resulting from such interest rate changes and from the current unrealized gains or losses would only occur if we sold the investments prior to maturity. We do not enter into investments for trading purposes and have not used any derivative financial instruments to manage our interest rate risk exposure.

Foreign Currency Risk

As of March 31, 2026 we held $1.8 million of bank deposits denominated in Euros. Such Euro denominated deposits carry a degree of risk from changes in currency exchange rates as the gains or losses from changes in exchange rates are included in our net income and comprehensive income (loss). As of March 31, 2026 a hypothetical 10% appreciation or depreciation of the U.S. dollar relative to the Euro would not have had a material impact on our condensed consolidated financial statements. At this time, we have not entered into, but in the future we may enter into, derivatives or other financial instruments in an attempt to hedge our foreign currency risk.

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Item 4. Controls and Procedures

(a)Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or Exchange Act, which are designed to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management recognized that disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, our disclosure controls and procedures were effective as of March 31, 2026 at the reasonable assurance level.

(b)Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. — OTHER INFORMATION

Item 1. Legal Proceedings

The information set forth in Note 5 , Commitments and Contingencies, under the heading “Contingencies,” in the notes to our condensed consolidated financial statements included elsewhere in this report is incorporated herein by reference

Item 1A. Risk Factors

Summary of Risk Factors

In addition to the information set forth in this report, you should consider carefully the factors and other cautionary statements discussed in the section titled “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K. There have been no material changes in our risk factors from those described in our Annual Report.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

(A) Bylaw Amendment

The Board of Directors of the Company amended and restated the Company’s amended and restated bylaws (as so amended and restated, the “Bylaws”), effective May 1, 2026. The amendments implement a cure process for certain deficiencies in director nomination notices submitted by stockholders. For nomination notices received by the Company within the time period specified in the Bylaws, the Company will notify stockholders of deficiencies in the notice and there will be an opportunity to cure such deficiencies within the time period specified.

This description of the amendments to the Bylaws is not complete and is qualified in its entirety by reference to the text of the Bylaws filed as Exhibit 3.2 to this report.

During the three months ended March 31, 2026, none of our officers and directors adopted, modified or terminated a “Rule 10b5-1 trading arrangement” (as defined in Item 408 of Regulation S-K of the Exchange Act).

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Item 6. Exhibits

Incorporated by Reference

Exhibit
Number

Description

Form

File No.

Exhibit

Filing Date

Filed
Herewith

3.2

Amended and Restated Bylaws of the Registrant

10.1

Offer Letter, dated as of February 24, 2026, between Kevin Haas and the Registrant

10.2

Change of Control and Severance Agreement, effective March 24, 2026, between Kevin Haas and the Registrant

31.1

Certification of Principal Executive Officer pursuant to Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*

Certification of Principal Executive Officer pursuant to 18 U.S.C. § 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)

32.2*

Certification of Principal Financial Officer pursuant to 18 U.S.C. § 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)

101.INS

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL

101.SCH

Inline XBRL Taxonomy Extension Schema

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase

104

Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act or deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act except to the extent that the registrant specifically incorporates it by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 6, 2026

VERACYTE, INC.

By:

/s/ Rebecca Chambers

Rebecca Chambers

Chief Financial Officer

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Date	Price Target	Rating	Analyst
6/2/2026	$55.00	Outperform	Wolfe Research
4/13/2026	$45.00	Buy	Jefferies
12/2/2025	$48.00	Underweight	Morgan Stanley
10/20/2025	$40.00	Hold	Canaccord Genuity
3/20/2025	$45.00	Buy	Craig Hallum
12/5/2024	$38.00 → $37.00	Buy → Neutral	Goldman
11/15/2024	$50.00	Outperform	Wolfe Research
10/16/2024	$43.00	Buy	UBS

SEC Form 10-Q filed by Veracyte Inc.

Crush Q1 2026 with the Best AI Superconnector

Recent Analyst Ratings for
$VCYT

$VCYT
SEC Filings

SEC Form 144 filed by Veracyte Inc.

SEC Form SCHEDULE 13G filed by Veracyte Inc.

Amendment: SEC Form SCHEDULE 13G/A filed by Veracyte Inc.

$VCYT
Insider Trading

VP, Chief Accounting Officer Wygant Jonathan exercised 24,000 shares at a strike of $24.80 and sold $1,089,624 worth of shares (24,000 units at $45.40) (SEC Form 4)

Director Epstein Robert S sold $440,129 worth of shares (10,000 units at $44.01) as part of a pre-agreed trading plan, decreasing direct ownership by 16% to 52,446 units (SEC Form 4)

SVP, General Counsel Mcguire Annie sold $398,211 worth of shares (10,204 units at $39.02) as part of a pre-agreed trading plan, decreasing direct ownership by 7% to 143,708 units (SEC Form 4)

$VCYT
Press Releases

Veracyte Announces Commercial Launch of the Prosigna Breast Test in the U.S.

ENZAMET Trial Shows Veracyte's Decipher Prostate Test Identifies Which Patients Benefit from Adding Chemotherapy in Metastatic Prostate Cancer

Landmark OPTIMA Trial Delivers Practice-Changing Evidence that Veracyte's Prosigna Test Identifies Patients with High-Risk Breast Cancer Who Can Safely Avoid Chemotherapy

$VCYT
Analyst Ratings

Wolfe Research resumed coverage on Veracyte with a new price target

Jefferies initiated coverage on Veracyte with a new price target

Morgan Stanley resumed coverage on Veracyte with a new price target

$VCYT
Financials

Veracyte to Host Investor Call on June 1, 2026 to Discuss ASCO Findings

Veracyte Announces First Quarter 2026 Financial Results

Veracyte to Release First Quarter 2026 Financial Results on May 5, 2026

$VCYT
Leadership Updates

A Toronto AI-Cardiac Diagnostics Company Just Cleared Three of the Hardest Validation Bars in Medtech

Veracyte Names Kevin Haas as Chief Development and Technology Officer

Veracyte Set to Join S&P SmallCap 600

$VCYT
Large Ownership Changes

SEC Form SC 13G filed by Veracyte Inc.

Amendment: SEC Form SC 13G/A filed by Veracyte Inc.

Amendment: SEC Form SC 13G/A filed by Veracyte Inc.

SEC Form 10-Q filed by Veracyte Inc.

Crush Q1 2026 with the Best AI Superconnector

Recent Analyst Ratings for $VCYT

$VCYT SEC Filings

SEC Form 144 filed by Veracyte Inc.

SEC Form SCHEDULE 13G filed by Veracyte Inc.

Amendment: SEC Form SCHEDULE 13G/A filed by Veracyte Inc.

$VCYT Insider Trading

VP, Chief Accounting Officer Wygant Jonathan exercised 24,000 shares at a strike of $24.80 and sold $1,089,624 worth of shares (24,000 units at $45.40) (SEC Form 4)

Director Epstein Robert S sold $440,129 worth of shares (10,000 units at $44.01) as part of a pre-agreed trading plan, decreasing direct ownership by 16% to 52,446 units (SEC Form 4)

SVP, General Counsel Mcguire Annie sold $398,211 worth of shares (10,204 units at $39.02) as part of a pre-agreed trading plan, decreasing direct ownership by 7% to 143,708 units (SEC Form 4)

$VCYT Press Releases

Veracyte Announces Commercial Launch of the Prosigna Breast Test in the U.S.

ENZAMET Trial Shows Veracyte's Decipher Prostate Test Identifies Which Patients Benefit from Adding Chemotherapy in Metastatic Prostate Cancer

Landmark OPTIMA Trial Delivers Practice-Changing Evidence that Veracyte's Prosigna Test Identifies Patients with High-Risk Breast Cancer Who Can Safely Avoid Chemotherapy

$VCYT Analyst Ratings

Wolfe Research resumed coverage on Veracyte with a new price target

Jefferies initiated coverage on Veracyte with a new price target

Morgan Stanley resumed coverage on Veracyte with a new price target

$VCYT Financials

Veracyte to Host Investor Call on June 1, 2026 to Discuss ASCO Findings

Veracyte Announces First Quarter 2026 Financial Results

Veracyte to Release First Quarter 2026 Financial Results on May 5, 2026

$VCYT Leadership Updates

A Toronto AI-Cardiac Diagnostics Company Just Cleared Three of the Hardest Validation Bars in Medtech

Veracyte Names Kevin Haas as Chief Development and Technology Officer

Veracyte Set to Join S&P SmallCap 600

$VCYT Large Ownership Changes

SEC Form SC 13G filed by Veracyte Inc.

Amendment: SEC Form SC 13G/A filed by Veracyte Inc.

Amendment: SEC Form SC 13G/A filed by Veracyte Inc.

Recent Analyst Ratings for
$VCYT

$VCYT
SEC Filings

$VCYT
Insider Trading

$VCYT
Press Releases

$VCYT
Analyst Ratings

$VCYT
Financials

$VCYT
Leadership Updates

$VCYT
Large Ownership Changes