Title

Presentation

Veracyte, Inc. beats earnings expectations. Reported EPS is $0.52, expectations were $0.34.

Operator: Good day, and thank you for standing by. Welcome to Veracyte, Inc. first quarter 2026 financial results webcast call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press 11 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press 11 again. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, Unknown Speaker, director of investor relations.

Unknown Speaker: Good afternoon, everyone, and thank you for joining us today to review Veracyte, Inc.’s first quarter 2026 financial results. Joining me on the call are Marc Stapley, our Chief Executive Officer, and Rebecca Chambers, our Chief Financial Officer. John Leite, our Chief Commercial Officer, will also be available for Q&A. Earlier this afternoon, we issued a press release detailing our first quarter financial results, and we posted an accompanying presentation in the Investors section of our website. Before we begin, I would like to remind you that statements we make during this call will include forward-looking statements as defined under applicable securities laws. Forward-looking statements are subject to risks and uncertainties and the company can give no assurance they will prove to be correct.

Additionally, we are not under any obligation to provide further updates on our business trends or our performance during the quarter. To better understand the risks and uncertainties that could cause actual results to differ, we refer you to the documents that Veracyte, Inc. files with the Securities and Exchange Commission, including the most recent Forms 10-Q and 10-K. In addition, this call will include certain non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP financial measures are included in today’s earnings release accessible from the Investors section of Veracyte, Inc.’s website. I am also pleased to highlight Veracyte, Inc.’s newly updated website, which makes it easier to access information on our test portfolio, including a publication search tool to help navigate our extensive and growing clinical evidence base.

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

Marc Stapley: Thank you, and thank you all for joining us today. We had an excellent start to 2026. In the first quarter, we delivered strong double-digit revenue and volume growth, exceeded our profitability expectations, and continued advancing key catalysts that position us well for long-term growth. This quarter highlights years of disciplined execution that have transformed Veracyte, Inc. into a stronger, more focused, scalable company. Five years ago, we set out to make Decipher a commercial success, grow our core franchises, expand operations, enhance clinical evidence, and build a strong pipeline. We revitalized the franchise, made Decipher the top prostate cancer gene expression test, increased lab capacity threefold, improved turnaround time and the no-result rate, and surpassed the 25% adjusted EBITDA margin.

Today, Veracyte, Inc. is a diversified, profitable company with a unique platform, multiple growth drivers, expanding clinical evidence, and strong clinician relationships, all achieved through consistent strategic execution. Now we believe we are approaching an inflection point that will shape the next five years for Veracyte, Inc. We are on the cusp of our two most significant product launches since Afirma: first, Prosigna LDT, supported by the OPTIMA trial with a key presentation at ASCO in June; and second, TruMRD launching initially in muscle-invasive bladder cancer. Together, these launches will expand our addressable market, extend our platform into new clinical settings, and position us for what we expect will be an even more transformative next five years for Veracyte, Inc.

and the industry. I will spend time discussing both of these growth catalysts shortly. But first, turning to our core business. Starting with Decipher. Since our acquisition in early 2021, the business has delivered consistent growth of more than 20% quarter after quarter. That momentum continued in the first quarter as we delivered approximately 28,000 tests, representing 24% year-over-year volume growth. This strong performance was driven by continued expansion in ordering providers and orders per physician, and it reflects Decipher’s differentiated position as the only gene expression test supported by high-quality clinical evidence and inclusion in NCCN guidelines. Advantages continue to drive adoption across the full spectrum of prostate cancer risk.

Over the last few quarters, we have seen particularly strong traction in advanced disease, where we believe there remains significant opportunity for Decipher. In the first quarter, we delivered nearly 30% growth across high-risk categories, including radical prostatectomy, biochemical recurrence, and metastatic disease. As we see more evidence supporting the use of Decipher in advanced disease, we expect to see continued growth over time. For example, we are excited about upcoming results from the ENZIMET Phase 3 trial, which will assess Decipher’s ability to identify metastatic patients who benefit from triplet therapy. Those data will be featured in an oral presentation at ASCO later this month. ENZIMET is one part of a broader evidence pipeline that continues to advance.

Four Phase 3 trials evaluating Decipher Prostate in treatment intensification and de-intensification have now completed enrollment, including the GUIDANCE trial, which reached that milestone in the first quarter meaningfully ahead of schedule. GUIDANCE includes more than 2,000 patients and is designed to evaluate how the Decipher score can function as an integral biomarker to guide treatment decisions for men with unfavorable intermediate-risk prostate cancer. PREDICT-RT has a similar goal in high-risk disease. These studies move beyond prognostic validation to prospectively demonstrate real-world clinical utility informing treatment choices. We believe they can support high-level evidence standards for guideline inclusion and coverage. While advanced disease is a compelling growth factor, we also continue to see physicians leveraging Decipher in the low-risk setting.

Since launch, we have delivered results for more than 80,000 patients in this population, creating a substantial real-world evidence database that continues to inform clinical utility. We believe there is a long runway to expand Decipher’s role in active surveillance, supported by a growing body of evidence. Recent data published in European Urology Oncology demonstrated Decipher’s ability to stratify risk among patients undergoing active surveillance, and we were encouraged to see enrollment completed in G-MAJOR, a large prospective Phase 3 randomized study evaluating how gene expression classifiers can inform active surveillance decisions. Taken together, these achievements and our robust pipeline of ongoing studies reflect more than a decade of sustained investment in evidence generation and position us for a steady cadence of high-quality data readouts over the coming years.

As our evidence base expands, we are also enhancing our clinical offerings. Through evidence generated using our Decipher GRID research-use-only database, we are incorporating additional predictive biomarkers, including PAM50, PTEN, and others. Over time, we plan to add select biomarkers to the Decipher clinical report to further support informed decision-making in high-risk and advanced prostate disease. We are also advancing complementary initiatives in digital pathology and AI-powered analysis, which we view as complementary to molecular profiling. As previously shared, we have been scanning our Decipher database and are close to digitizing all historical slides for U.S. patients—more than 350,000 images. We plan to leverage this extensive dataset together with whole-transcriptome data in collaborations with leading academic centers to better define where these technologies can add value in clinical practice.

Across recent urology conferences, we have seen the field shifting toward biology-driven treatment strategies for bladder cancer, with Decipher Bladder emerging as a natural extension of our platform. This momentum will be on display at the upcoming AUA annual meeting, where six studies will be presented highlighting our Decipher Bladder portfolio’s ability to advance personalized care in bladder cancer, including insights generated from our GRID research-use-only database. These presentations build on the strong Decipher Bladder data shared at ASCO GU and support the early but growing adoption we are seeing in the field. Overall, we are very pleased with Decipher’s start to the year. We believe the franchise is well positioned with unmatched scale, depth of evidence, and commercial reach in urology.

With only one in three men with prostate cancer in the U.S. currently benefiting from the insights that Decipher offers across the spectrum of disease, we believe it can continue to be a durable long-term growth engine, and we see meaningful extensibility into bladder disease as an incremental growth driver in the coming years. Turning to Afirma. We delivered approximately 17,200 tests in the first quarter, representing 12% year-over-year volume growth. This reflects both solid demand across our customer base and strong execution on operational initiatives that improve patient access to actionable results. As we have discussed previously, we completed the full transition to our V2 transcriptome workflow in the fourth quarter, establishing a more scalable and cost-effective platform.

Importantly, this transition has also enhanced our ability to deliver definitive results for a broader set of patients, including historically challenging low-input RNA samples. That momentum continued in Q1, with our no-result rate improving both sequentially and year over year. As a result, more patients and physicians received actionable Afirma results to guide clinical decision-making, contributing approximately 400 basis points to our volume growth in the quarter. Encouragingly, we saw healthy new account wins, increased utilization, and a high number of ordering providers in the quarter, reflecting strong engagement and the effectiveness of our strategy. We remain focused on expanding the already robust clinical evidence foundation supporting Afirma.

Through our Afirma GRID research-use-only database, we continue to generate a steady cadence of new data and incorporate additional molecular signatures into the latest version of GRID. We believe this growing dataset increasingly reinforces the Afirma GRID as a critical research-use-only tool to advance the understanding of thyroid nodules and thyroid cancer. Importantly, our commitment to evidence-backed research translates into real-world clinical and economic impact. A recent independent study analyzing Medicare payment data from 2016 to 2023 found that increased adoption of Afirma was associated with a meaningful reduction in thyroid surgery rates among Medicare beneficiaries. These findings highlight how Afirma test results help physicians confidently rule out surgery when unwarranted, supporting better-informed treatment decisions, reducing overall health care costs, and helping patients avoid unnecessary surgery and its long-term consequences.

The study also reinforced Afirma’s position as the leading molecular test for indeterminate thyroid nodules. Taken together, Afirma’s improving operational performance, expanding clinical evidence, and demonstrated real-world impact give us confidence in the franchise’s ability to sustain healthy growth in 2026 and beyond. We believe our Afirma test remains well positioned to deliver value for patients, physicians, and payers while serving as a stable and durable growth engine within our portfolio. Building on the momentum across our core franchises, Prosigna LDT represents one of two major upcoming product launches that we believe mark an important next phase of growth. Prosigna is built on the well-established and scientifically validated PAM50 signature and provides deeper insights into the biological classification of breast cancer.

By reporting the risk of recurrence using intrinsic subtype and a score to estimate the 10-year probability of distant recurrence, Prosigna is designed to inform treatment decisions at a critical point in a patient’s care journey. We see a significant opportunity in the U.S. market, where approximately 225,000 breast cancer patients are diagnosed annually with early-stage hormone receptor–positive disease and are eligible for Prosigna testing. This is a large, clinically meaningful population where improved biological insight has the potential to enhance outcomes and help avoid unnecessary treatment. Clinical evidence will be a key driver of adoption, as it always is. We look forward to the upcoming presentation of results from OPTIMA, a large Phase 3 randomized prospective trial enrolling approximately 4,500 patients.

I am pleased to share that this presentation has now been confirmed on the agenda for ASCO later this month. If positive, we believe these results could be practice changing and further strengthen Prosigna’s already robust clinical foundation, and beyond OPTIMA there are additional studies underway that we expect will continue to expand the evidence base and support share gains over time. We remain on track to commercially launch Prosigna LDT by midyear. In preparation, we are scaling our commercial and medical science liaison teams and deepening engagement with key opinion leaders. Our second major upcoming launch is TruMRD, a whole-genome sequencing–based MRD platform and a key step in expanding into minimal residual disease. We remain on track to launch TruMRD in MIBC by the end of the second quarter and plan to leverage the strength of the Decipher brand and our established commercial channels in urology and radiation oncology, where we believe 70% of patients with MIBC are seen.

Our initial focus will be on recurrence monitoring in patients who have completed curative-intent therapy, representing the majority of patients treated in this setting. We believe the initial TruMRD test launch addresses a significant unmet clinical need and represents an important proof point for our broader platform as we enter the large and growing MRD market. Early data and strong engagement from leading academic institutions reinforce our confidence that our TruMRD platform’s differentiated whole-genome approach positions us well to drive adoption and capture meaningful share over time. The TruMRD platform is highly scalable, with applications well beyond bladder cancer. We are building an expanding body of clinical evidence with several studies completed across bladder, colorectal, and lung cancer, as well as additional indications.

Our pipeline continues to grow with more than 10 studies currently in testing or analysis, 12 in contracting, and 29 in active planning spanning muscle-invasive and non–muscle-invasive bladder cancer, breast, lung, colorectal, prostate, and kidney cancer, as well as immunotherapy treatment response. We are also seeing growing external validation of this approach. At the recent American Association for Cancer Research Annual Meeting in San Diego, we hosted a Spotlight Theater focused on the clinical utility of the TruMRD platform for tumor-informed ctDNA analysis. The session was well attended, underscoring the strong and growing interest in our differentiated approach to MRD. Investigators presented previously shared data from multiple large clinical trials, including TOMBOLA, Umbrella, and NEOBLAST.

As a reminder, NEOBLAST is the first prospective interventional study utilizing TruMRD results and is designed to assess the feasibility of active surveillance in bladder cancer patients with negative ctDNA. As we expand our portfolio and advance our pipeline, we are also investing in the leadership and organizational capabilities required to support our next phase of growth. I am pleased to welcome Dr. Kevin Haas, who recently joined Veracyte, Inc. as our Chief Development and Technology Officer. Kevin brings deep expertise in product innovation, development, and software, with a strong track record of translating complex science into clinically impactful solutions. His leadership will be instrumental as we continue to advance our product roadmap and extend our reach to more clinicians and patients globally.

I would also like to welcome Tracy Ward, our new Chief Human Resources Officer, who will play an important role as we scale the organization and help us to grow our culture and people—key ingredients to our success. In closing, we believe Veracyte, Inc. is well positioned with a long runway to deliver durable double-digit growth through execution of our long-term strategy. None of this would be possible without the execution of our team, and I am proud of what they have accomplished as we reach more patients than ever before. With that, I will now turn the call over to Rebecca to review our first quarter financial results and walk you through our outlook for 2026.

Rebecca Chambers: Thanks, Marc. The first quarter was a very strong start to the year and reflects the disciplined execution and scale we have built over the past several years. We delivered total revenue of $139.1 million, representing 21% year-over-year growth. Total volume increased to approximately 47,600 tests, up 17% compared to the same period in 2025, and we generated $35.2 million of cash from operations, ending the quarter with $439.1 million in cash, cash equivalents, and short-term investments. Testing revenue for the quarter was $135.1 million, an increase of 26% year over year, driven by Decipher and Afirma growth of 30% and 21%, respectively. Total testing volume was approximately 45,200 tests, representing 19% growth year over year.

Testing ASP was $2,980, up 6% compared to the prior year and inclusive of approximately $4 million of prior-period collections, or PPCs. Excluding PPCs, normalized ASP increased 3% to $2,900, driven by continued strong collections. Turning to gross margin and operating expenses, I will focus on our non-GAAP results. Non-GAAP gross margin was 75.7%, up 350 basis points year over year, driven by strength in our testing business and an improved business mix. Testing gross margin increased 230 basis points to 70.4%, reflecting operational efficiencies from our V2 transcriptome workflow and higher prior-period collections in the quarter as well. Non-GAAP operating expenses increased 7% year over year to $64.6 million. With the addition of our new Chief Development and Technology Officer, certain IT expenses associated with software development and project management, previously reported in G&A, have been moved directly into R&D as they are fully dedicated to our product development objectives.

As a result, R&D expense increased $8.5 million year over year to $24.1 million, driven by our organizational changes and clinical investment, partially offset by a reduction of allocated expenses. Sales and marketing expense increased $2.2 million to $24.7 million, reflecting hiring and investments in our existing portfolio and preparation for the upcoming launches of Prosigna LDT and TruMRD in MIBC. G&A expense decreased $6.6 million to $15.8 million, primarily due to the organizational changes previously mentioned. From a profitability standpoint, we delivered GAAP net income of $28.7 million in the quarter. Adjusted EBITDA was $42.8 million, or 30.8% of revenue, up 73% year over year and well above our long-term target of 25%. This level of profitability underscores the operating leverage we have built over the last five years and provides the flexibility to continue investing in our growth drivers while generating meaningful cash.

Turning to our 2026 outlook, we are raising full-year total revenue guidance to a range of $582 million to $592 million, representing 13% to 14% year-over-year growth, compared to our prior range of $570 million to $582 million. This reflects expected testing revenue growth of 16% to 18%, excluding the contribution of new tests, with Decipher revenue growth of approximately 20% and Afirma revenue growth in the high single-digit to low double-digit range, benefiting from improvements in our no-result rate. As a reminder, our guidance excludes any potential prior-period collections in future quarters. Given the strong start to the year, we are also increasing our full-year adjusted EBITDA guidance to greater than 26%. This outlook reflects our updated revenue expectations and continued investment to support our growth initiatives throughout the year.

As always, while we plan expenses on an annual basis, adjusted EBITDA may fluctuate quarter to quarter due to the timing of investments and PPC variability. In closing, the financial performance we delivered this quarter reflects the significant transformation Marc described—five years of disciplined execution that have created a much more scalable, profitable, and resilient business. As we approach the next inflection point with multiple important product launches ahead, we are well positioned to build on this momentum, further strengthen our financial foundation, and continue expanding our impact. Most importantly, we remain focused on supporting more patients across their cancer care journey while creating long-term shareholder value. We will now open the call for questions.

Operator, please open the line.

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Operator: Thank you. At this time, we will conduct a question-and-answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Our first question comes from the line of Puneet Souda of Leerink Partners. Your line is now open.

Marc Stapley: Thanks, Puneet. Happy to take that, and then Rebecca will address the financial impact. To remind everyone, the benefit on the no-result rate is coming from our transition of the entire Afirma workflow to the new V2 transcriptome. That was a staged launch in Q4 with a full launch by the end of the quarter, and now we are seeing our first quarter of full benefit from that. It has frankly exceeded our expectations in terms of how much better that assay is at recovering samples that previously would have been lost. Most importantly, beyond the financial impact, there is a real patient and physician impact from being able to provide a result and an answer more often than we were previously. I could not be happier or more proud of our team for executing this long and complex project.

The great benefit is that the same platform is now available for our other tests, and the next test to use it after Afirma will be our Prosigna test. Rebecca will cover the financial impact.

Rebecca Chambers: Thanks for the question, Puneet. During the quarter, the improvement contributed approximately 400 basis points to volume growth. I think that is about as good as it is going to get. It is above our expectations from our original guide for Afirma. If you recall, that original guide included a no-result rate improvement expectation of 0% to 2% for that mid- to high-single-digit Afirma revenue growth guide. We have now updated it to high single digits to low double digits, and that includes a 2% to 3% assumption. Two reasons why that assumption is below what we saw in the fourth quarter: one, no-result rates tend to worsen over the summer months with heat-related RNA degradation; and two, we have a comp from the fourth quarter of 2025 as we started to transition and see the benefit.

For those two reasons, for the full year we are now expecting a 2% to 3% benefit from the no-result rate improvement. That flows through at essentially 100%. And, again, a huge benefit to patients and a huge thank you to the team. We are excited to launch Prosigna on the backbone of the new transcriptome as well.

Operator: Thank you. Our next question comes from the line of Unknown Analyst of Jefferies. Your line is now open.

Unknown Analyst: A couple from me. First, for the momentum in testing revenue, how should we think about the exit velocity of this business heading into the launch of new products? I know you are not baking that into the revenue guidance raise, but in terms of growth in the back half of the year. And second, the competitive moat for Decipher—how is the sales team positioning Decipher against newer, potentially lower-cost pathology or AI-based competitors?

Marc Stapley: I am happy to address both. On new product introductions and momentum, as we have said, we are not including Prosigna and TruMRD in our guide for this year. We are going to manage those launches for customer and patient impact, and then scale as we see interest and our ability to operationalize in the lab. In terms of the ramp, it is hard to call a specific analog. For Prosigna, we are launching into a market that is very well penetrated. We do not have to educate physicians on why molecular diagnostics make sense for this population; we need to demonstrate, on the back of strong evidence, why Prosigna is a better test for patients. That implies a different ramp and strategy than a greenfield launch. For TruMRD, while people call it a competitive market, it is still fairly underpenetrated at this point, and there is still a lot of education to do, particularly in the muscle-invasive bladder cancer setting.

On the competitive moat around Decipher, it is the same as we have always said. Whether you are talking about digital pathology/AI or other molecular diagnostics, we have generated so much evidence for Decipher over more than a decade—and remember, most of these studies had to start years ago to read out in this disease state—that it creates a substantial competitive moat. Specifically for digital pathology/AI, it is a recent approach. It is in the marketplace, but customers are quite skeptical, especially when they see discordant results, which have been demonstrated repeatedly. Our answer is to scan every slide we have—about 350,000—and make those images, along with GRID transcriptomes, available to the community to do the appropriate research, and to demonstrate the utility of that technology alongside molecular diagnostics.

Physicians typically do not trade one thing for another; more information is better, as long as it is clinically proven. John, anything to add?

John Leite: The only thing I would add is that on the pricing side, I have not seen pricing alone motivate a physician. All the other things would have to be true first, and then pricing would be a very late consideration in terms of driving the adoption or selection of a test.

Operator: Our next question comes from the line of Douglas Schenkel of Wolfe Research. Your line is now open.

Douglas Schenkel: Afternoon, and thank you for taking my questions. First, on Decipher: this is the 15th consecutive quarter of 20% plus volume growth. The market is about 33% penetrated. Incidence growth is around 6% per year. As we sit here today, how do you think about the multiyear sustainability of 20% growth, and can you disaggregate what will drive it—deeper penetration of existing accounts, opening up new practices, and/or share capture? Second, on OPTIMA and the upcoming ASCO readout in June: what is “good enough” to lean in aggressively on the launch in the back half, and if things go well, OPTIMA enrolled patients with up to nine nodes while Oncotype is approved for up to three nodes. How do you think about TAM expansion and potentially a differentiated label and reimbursement?

Marc Stapley: Thanks, Doug. On Decipher growth, thanks for calling out the sustained trend. Decipher has been on a very steady volume growth trajectory. Over time, we have penetrated more risk categories and the denominator has grown, yet volume growth has remained consistently strong. Given that we are only about a third penetrated, two-thirds of men dealing with prostate cancer are not getting the benefit of the insights that Decipher provides. With the level of evidence and NCCN guidelines supporting the test across low, intermediate, high/very high, metastatic, biochemical recurrence, and post–radical prostatectomy with evidence now, every one of those categories should, over time, be getting a genomic test. That is why I think we continue to see growth.

I am not guiding to whether it will be 20% in the future, but in terms of volume I do not see a reason for it to slow across categories. Intermediate is the largest and continues to penetrate, and, as I noted, we saw about 30% year-over-year growth in Q1 in high-risk categories. We also have multiple studies reading out over the next few years that cover low-risk and surveillance as well. There is a steady drumbeat of evidence around Decipher that keeps it going, and we are quite excited about the ENZIMET trial for the metastatic population at ASCO as well. On OPTIMA, John, do you want to take that?

John Leite: Certainly. Thanks, Doug. Unfortunately, the bar is quite high. OPTIMA will require a positive outcome on the primary endpoint—a demonstration of noninferiority against the control—for the predictive claim. We have said all along we believe we need that data to merit Level 1A evidence that would drive, we hope, inclusion in the guidelines so that we can, at a minimum, be on par with the product on the market today, and then differentiate with the latest clinical utility data and performance of the test.

Marc Stapley: Thanks, John. Doug, I also think nodal status is important, and more than that, the breadth of what OPTIMA addressed, including premenopausal and postmenopausal populations. It is a very well-designed study, and our launch approach depends on it reading out appropriately and favorably. We hope that will be the case on May 30, which is Saturday at the end of the month.

Rebecca Chambers: Importantly, our hiring is going quite well. We are building the team, and with a positive OPTIMA readout, guideline inclusion, publication—all of that—we would turn to be more aggressive. I would think that would be an “exiting the year” sort of decision, and we are excited about the opportunity for Prosigna to be a multiyear growth driver for the company.

Operator: Our next question comes from the line of Subbu Nambi of Guggenheim. Your line is now open.

Subbu Nambi: You are raising guidance by a few million more than the beat, and the guidance still does not include the impact of new tests. It sounds like most of the raise is for Afirma as you reiterated your Decipher revenue growth outlook of approximately 20%. Any additional details you can share as to what you are expecting now for Decipher volume and ASP?

Rebecca Chambers: Thanks, Subbu. You are absolutely right. We raised guidance by the beat and then a little bit more at the midpoint for the raise in Afirma. Decipher is trending as expected—plus or minus a day of volume at any point in time is kind of what we expect, and this quarter was no different. It was a good quarter, but the outlook for the rest of the year is around that 20% guide we had coming into the year. In prior years, we had a really big step-up sequentially in the second quarter for Decipher given the timing of guidelines. This year, guideline timing was in the back half of the prior year, and that is one factor we have taken into account on a sequential basis. Competitively, we remain incredibly strong. ASP, as I cited, was up meaningfully ex-PPC, and the trends of the business are very strong. The guidance raise reflects those trends as well as the fact that we only have one quarter under our belt.

Subbu Nambi: Thank you. And as you think about your commercial indications for TruMRD beyond MIBC, you mentioned studies have been completed in MIBC, CRC, and lung, and ongoing studies in other indications. Can you help us understand where you are in selecting the next indication and your strategic priorities?

Marc Stapley: As I mentioned, we have a lot of studies in progress, and that keeps growing. We have a regular strategic planning process, and our next huddle on that is in July. We will continue to advance our thinking there. In the meantime, our priority remains launching our MIBC product, securing reimbursement coverage, and starting to penetrate the muscle-invasive bladder cancer opportunity. No new updates on the next launch and timing. Typically, we do not pre-announce the exact order because R&D can change, and we do not want changes in sequencing to be misinterpreted. It is all driven by the evidence and timing of the evidence coming through.

Operator: Thank you. Our next question comes from the line of Mason Owen Carrico of Stephens Inc. Your line is now open.

Mason Owen Carrico: In terms of Prosigna LDT, if the OPTIMA study reads out in June, do you think it can be published before the NCCN breast cancer panel meeting, which I think is in August, so that it could be included in that review?

Marc Stapley: I do not think so. John may have more to add, but that might be a bit too optimistic. The publication might come out before then, but whether it influences the guidelines, we just do not know. If you look at our past history in other indications, we have not needed guidelines to get good traction; guidelines have been an additional catalyst further down the road. John?

John Leite: You answered appropriately. We just do not know. If the publication comes out early enough, it is possible—with a high enough impact—that NCCN would consider late-breaking data and have a sufficiently robust discussion to perhaps include it in the guidelines, but that is speculative. It is not outside the realm of possibilities, but we do not know what they may or may not do.

Mason Owen Carrico: Were Decipher volumes impacted at all in the quarter by weather? If so, could you quantify that impact?

Rebecca Chambers: The weather was slightly worse than the prior year, but most of the impact was caught up during the quarter as we exceeded our expectations. We have always said plus or minus a day of volume—which tends to be 400 to 500 samples—can fall on either side of a quarter. We were pleased with the performance of the Decipher franchise during the first quarter despite challenging weather.

Operator: Thank you. Our next question comes from the line of Kyle Mikson of Canaccord Genuity. Your line is now open.

Kyle Mikson: On Afirma, can you talk about prior-period collections for that test specifically and how you think about visibility and ASP upside for that test? It seems like volume growth could be relatively steady, so pricing might be the one variable.

Rebecca Chambers: The guide of high single digits to low double digits includes the Q1 prior-period collections. Q1 prior-period collections for Afirma were about half of the total $4 million of PPCs, which is more than usual. We do not assume prior-period collections in our guide going forward. Ex–prior period, Afirma ASP was up around 100 basis points, and Decipher was up above that to get to the blended average of 3%. I do not think there is as much room on Afirma, given how long it has been on the market and the 280 million covered lives. There is more ASP upside in Decipher over a multiyear period, and that, ex-PPCs, is what manifested during the quarter.

Kyle Mikson: You have been profitable for a while, you have a strong cash position, and outstanding EBITDA margins. How do you think about capital allocation going forward, and with respect to M&A, what would be attractive attributes in a potential target? Is a large TAM important? Nearing reimbursement critical?

Marc Stapley: No real change in philosophy. We are always active in the market and look at everything, but we are discerning. We have an oncology-based, data-driven strategy. Opportunities that fit that strategy make the most sense. That does not mean we would not consider tuck-ins or technology plays that help advance the strategy. With our financial profile—strong, consistent revenue growth and strong profitability—we think carefully about anything that would be dilutive and take that into account accordingly.

Operator: Our next question comes from the line of Keith Hinton of Freedom Capital Markets. Your line is now open. Are you there, Keith? I am showing no further questions at this time. Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.

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